As Bitcoin crested the $8,000 mark recently, many investors seem poised to once again look to the cryptocurrency as a potentially viable alternative to traditional safe havens like gold and bonds.

Bitcoin is currently trading at roughly $8,084 on Friday, up 3.16% in the past 24 hours, according to Coinmarketcap.com.

Bitcoin has generally been regarded as risky, explained Dan Held, co-founder of Interchange, a company that advises businesses on how to manage their crypto assets. But he noted that the currency’s renewed vigor might be the first indication that it holds weight as a “risk off” trade, an investment treated as a safer bet when markets are tumultuous. Notably, Bitcoin catapulted higher in value Monday when the Dow plunged 617 points, perhaps indicating that investors turned to bitcoin as a safe haven asset.

“It’s bitcoin’s moment to shine when people momentarily give up on the government or the banking system,” Held added.

Apart from renewed interest when stock market prices are flagging, BItcoin has been showing signs of more spirited interest since the start of 2019.

“When the market started to rise, it drew more people in,” explained James Putra, head of product strategy at brokerage firm TradeStation Crypto. “Larger players started to take bites out of the marketplace; it’s a common and familiar approach.”

Still, it’s hard to shake off the fact that the cryptocurrency has been here before. After rallying to a high of roughly $20,000 in 2017, based on investors jumping on the bandwagon and trying to get rich quickly, the bubble finally burst, sinking the cryptocurrency to less than $4000 within just a year’s time. Since the bitcoin boom in 2017, the world’s largest cryptocurrency has dropped more than 60% from its  high.

“Manipulation could very well be behind the recent market moves. To act like bitcoin and crypto currency prices are purely driven by supply and demand of little traders … ignores the specific mechanics of this marketplace,” said John Griffin, a finance professor at the University of Texas at Austin and one half of the duo that penned the paper on price manipulation last year.
“It would not be a stretch nor surprising to find that manipulative activity is behind the recent runup when the underlying market mechanics are similar to before,” Griffin added.
Other financial experts have doubts as well.
“I don’t think anyone really knows what this is due to,” said Tim Massad, former chairman of the US Commodity Futures Trading Commission, speaking about the latest rally. “But you worry that manipulation could be a contributing factor given the lack of regulation and transparency in this market compared to other markets.”
 For more news and analysis on bitcoin, visit our Bitcoin category.

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