Bitcoin prices continue to surge, while U.S. markets slump as a result of a potential trade war between the U.S. and China. Bitcoin is now trading above the $8,000 threshold, the highest it’s been in over nine months. Prices for the cryptocurrency have soared approximately 60.84 percent in the past month, or $3,086.14. While Bitcoin has benefitted from geopolitical tensions, another factor could be causing the recent price surge.
“Anticipation of the upcoming supply shock [of new BTC introduced via mining] may be creating upward pressure on the price of Bitcoin,” wrote Alyse Killeen, a partner at the investment and advisory firm Stillmark, in an email, according to TechCrunch. “Bitcoin is introduced to the market when the Bitcoin protocol rewards miners who validate blockchain transactions. Specifically, the Bitcoin protocol gives BTC to miners for adding blocks to the blockchain. Today, miners earn 12.5 BTC for adding a new block that is accepted by the network. In May 2020, the time of the next ‘halvening,’ that reward will be reduced to 6.25 BTC, thereby reducing the total number of BTC introduced to the market on a daily basis.”
Cryptocurrency has continued to gain appeal amongst major retailers. On Tuesday, a new payment app named Flexa was launched allowing consumers to make purchases at a number of major retailers, including GameStop Corp (NYSE: GME), Nordstrom, Inc. (NYSE: JWN) and Amazon.com, Inc.’s (NASDAQ: AMZN) Whole Foods. “This is the first real instance of decentralized global retail payments, with the power to make commerce more efficient and accessible for billions of citizens globally,” said Flexa CEO Tyler Spalding in a statement. “The legacy payment systems are complicated and costly. This solution provides a way for cryptocurrencies to solve these problems and allow merchants to conduct inexpensive and fraud-resistant transactions.”