Market Overview

Pro: 3 Factors Driving Bitcoin Higher

Pro: 3 Factors Driving Bitcoin Higher

Digital currency Bitcoin continues to flirt with the $9,000 mark and has nearly tripled in value since late 2018.

Three factors are mostly responsible for the surge in value, according to Bart Smith, Susquehanna's head of digital assets.

3 Factors

Multiple factors are at play that support the rise of bitcoin, but one of the more notable catalysts is the ongoing Sino-American trade war, Smith said on CNBC's "Squawk Box" Thursday.

The ongoing trade spat has prompted the Chinese yuan to trade near six-month lows. It is likely Chinese citizens view bitcoin as either a hedge against currency fluctuations or even as a method to move capital outside of the country, Smith said. 

The second catalyst supporting bitcoin, in the pro's view: a "tremendous amount of excitement about U.S. regulated platforms" coming out of the Consensus conference held earlier this month in New York, he said.

Third, there is now a lot of optimism around U.S.-based brokerages offering bitcoin access to retail investors, Smith said.

Granted, no one firm has yet to openly announce the availability of bitcoin, but "there is a lot of talk" — and Smith said investors are rushing to buy bitcoin ahead of the news.

Store Of Value Or Speculation?

Bitcoin's historical volatility raises the question of whether the asset class can be considered a store of value or a speculative investment.

The cryptocurrency remains in its early stages of its life, and if broader adoption takes place over time, the volatility could decrease, Smith said.

It remains to be seen if bitcoin can scale to the size of major credit card companies who facilitate 40,000 transactions per minute, he said. 

At the end of the day, investing in bitcoin is risky, and investors should understand the risk and allocate accordingly, the digital assets expert told CNBC. 

Related Links:

The Best Opportunities In Crypto Aren't Decentralized

Yusko: Bitcoin Is 'Actually Quite Easy To Value'

Posted-In: Bart Smith Bitcoin CNBC Squawk BoxCryptocurrency Top Stories Markets Media Best of Benzinga


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