Bitcoin is at a 17-month high
Cryptocurrencies continued their exceptional run on June 26. Bitcoin (BTC) rose 15% and reached $13,400—a 17-month high. The cryptocurrency has risen 225% over the last three months.
The rally came after Bitcoin trOD water and the excitement over cryptocurrencies went away.
However, a bulk trade by institutional investors, followed by Facebook announcing its own cryptocurrency, gave bitcoin and other cryptocurrencies a big boost.
What’s behind bitcoin’s astronomical rise?
One theory behind the cryptocurrency rally is that it’s being viewed as a good hedge against geopolitical tensions including the US-China trade war. Another reason behind the skyrocketing bitcoin is an event known as “halvening.” Traders expect the event sometime next year, which slashes bitcoin miners’ reward in half.
Bitcoin may have some value in the portfolio due to its low correlation with other assets, especially equities. However, bitcoin’s extremely high volatility puts off risk-averse investors.
Advanced Micro Devices (AMD), which makes chips used for mining cryptocurrencies, has struggled to grow due to the “crypto hangover” in the previous few quarters. However, the company’s stock has risen 16.5% in the last three months despite uncertainties about China. Investors expect more demand for Advanced Micro Devices’ chips.