January 2020 looks to be quite prolific for Bitcoin buyers. The BTC has added about $ 1,500 in its value, recovering from $ 7,150 to $ 8,600. Considering the fact that its monthly growth amounted to almost 20%, Bitcoin has all chances to receive a well-deserved status of the most effective instrument of the financial market in January. Only some altcoins demonstrated better performance, but they gained only due to the growth of interest in Bitcoin.
It is worth noting that BTC keeps being popular as a safe haven asset. This is confirmed by its sharp growth and increase in the number of transactions in the blockchain system with every manifestation of panic in the financial markets. The Middle East conflict between the United States and Iran, the U.S.-China trade war, the impeachment of President Trump - all these high-impact events at the beginning of 2020 provoked an obvious risk aversion, which was followed by a well-considered choice in favor of safe-haven assets. Amid this news, Bitcoin was deemed as a kind of insurance against sanctions, frozen bank accounts and other hostile actions of governments that can deprive people of access to their money.
Today, market panic is being bolstered by the fears that a newly-discovered coronavirus will spread outside China. The epidemic threat grows as millions travel abroad to celebrate the Lunar New Year. All this reminded investors of the consequences of an outbreak of SARS in 2003, which resulted in 774 deaths and Hong Kong stepping into an economic recession. If the outbreak is not curbed as soon as possible, global stock markets will continue to decline, forcing traders to flock to safer assets such as gold, yen, franc and bonds. We believe that their choice may also fall on Bitcoin.
In addition to global trends, there is another potential trigger that can provide a significant boost to the BTC rate by the end of the first half of 2020. We are talking about the third Bitcoin halving in less than 4 months. After the first two halving events, the BTC/USD demonstrated active growth reaching new local maximums. This happened for the reason. After every halving, the supply of new Bitcoins is reduced in half, which leads to higher demand and the price surge. It is worth noting that the uptrend in BTC was observed not only after the halving event itself but also before it. The Bitcoin halving generally reduces miners' profitability, so they seek to earn the most while they can until the reward for each mined block is cut in half. We can’t say for sure, that the situation will repeat itself this time, and BTC/USD will head to new highs. However, we can assume that traders will base their predictions of future BTC behavior on this historical precedent. In other words, we shouldn't underestimate the prospects of another Bitcoin mooning above $20K.