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Bitcoin hits new January highs

By Hugh Wilson

The cryptocurrency breaks a long streak of poor January performances by posting a 30 per cent gain

Bitcoin has enjoyed its best January performance for seven years, with fears over coronavirus and the upcoming “halving” event driving the cryptocurrency beyond $9,400.

Bitcoin was up by nearly 30 per cent in January, with the value of all Bitcoin in circulation jumping by $39.7bn (£30.5bn, €35.9bn). The percentage gain was the best since January 2013, one of Bitcoin’s best ever years.

January is usually considered a poor month for Bitcoin investors, with January 2019 and January 2018 registering falls of 7.59 per cent and 26.88 per cent respectively.

Analysts have put current gains down to global trade uncertainties, exacerbated by the emergence of coronavirus in China, alongside the upcoming halving.

The respiratory illness has infected over 17,000 people so far and has resulted in travel bans to and from the world’s second largest economy. Mothballed factories have also contributed to a slowdown in the demand for oil.

Fears are growing that the coronavirus outbreak could hit global growth, with investors increasingly viewing Bitcoin as a safe-haven asset in difficult times.

The price of Bitcoin has also been supported by the coming “halving” event, scheduled for May 2020.

During a halving, which occurs roughly every four years, the reward for mining new blocks is halved. This limits the supply of new coins and often results in the price of Bitcoin appreciating rapidly.

At the moment miners are rewarded with 12.5 Bitcoin per block mined. This will drop to 6.25 Bitcoin in May.

FURTHER READING: Bitcoin prediction this week February 3 to 9: Bitcoin likely to move up gradually to $10,000

FURTHER READING: Anticipation grows ahead of Bitcoin halving

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