Flagship cryptocurrency bitcoin spiked on Monday after the Chinese stock market crashed on its reopening following an extended Lunar New Year break.
Bitcoin surged to $9,608, the highest since October, shortly after markets opened in Hong Kong. The digital currency has entered a bull rally on January 3, adding nearly 40 percent since then. It’s the best start to the year for bitcoin since 2012.
Worries about the spiraling coronavirus outbreak have been boosting bitcoin which usually goes up when investors are nervous. Chinese stocks which had been closed since January 24 plummeted the most since 2015 as they resumed trading on Monday.
“As trust in global institutions and markets continues to deteriorate, we will see highly mobile digital assets like bitcoin explode in value,” Jehan Chu, managing partner with blockchain investment and advisory firm Kinetic Capital, told Bloomberg.
The spike in bitcoin is indicative of how far the largest cryptocurrency has come since it broke out of its longer-term downtrend in December, said Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno. “We’re potentially seeing a final wave rally in bitcoin with the current bullish action post the break of the downtrend,” he said, adding that “there is support around $9,250.”
The death toll from the coronavirus in China has grown to 361, with more than 17,000 people infected.