Three Reasons Cryptocurrencies are Moving Aggressively Higher

Cryptocurrencies are exploding higher.

After starting May 2019 at $5,000, Bitcoin is now nearing $8,000. Ethereum (ETH) is back above $200. Ripple (XRP) is at 33 cents. Litecoin (LTC) is back above $90.

There are four potential reasons for that.

Reason No. 1 – Cryptocurrencies are Now Safe Havens

With the trade war wreaking havoc on global markets, investors may be buying cryptocurrencies to hedge their exposure to traditional assets.

After all, there is a good amount of fear in the markets.

On May 6, 2019, the Dow Jones Industrial Average (DJIA) plunged 400 points after President Trump threatened to escalate the trade war between the U.S. and China. In fact, he tweeted that he’d raise tariffs to 25% from 10% because talks were moving too slowly.

By May 8, 2019, the Dow Jones moved 100 points higher after a Chinese delegation informed the White House that it would still be coming to the U.S. to make a deal.

By May 9, the Dow Jones plunged 350 points after President Trump said that China “broke the deal,” fueling fears that the U.S. and China will be unable to reach an agreement before the 25% tariffs take effect at 12:01 a.m. Friday.

"By the way, you see the tariffs we're doing? Because they broke the deal. They broke the deal," Trump said, as quoted by CNBC.  "So, they're flying in, the vice premier tomorrow is flying in — good man — but they broke the deal. They can't do that, so they'll be paying."

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Reason No. 2 – Institutions are Buying

Fidelity for example, will begin buying and selling Bitcoin for institutional investors in the next few weeks. In fact, according to Bitcoinist, Fidelity Investments with asset under management currently north of $2.4 trillion could potentially open BTC trading to its over 27 million customers. Such a move would provide further institutional exposure to the top-ranked cryptocurrency.

Reason No. 3 -- Microsoft (MSFT) is adding fuel to the crypto rally

Its Ion project is the first decentralized infrastructure implemented by a major company that’s being built directly on the Bitcoin blockchain. 

"For example, if you log onto Airbnb using Facebook, a protocol deals with the software that sends the personal information from your social profile to that external service provider. In this case, Ion handles the decentralized identifiers, which control the ability to prove you own the keys to this data,” according to CoinDesk.

For a company like Microsoft essentially tell the world it’s not scared of Bitcoin is a giant step in the right direction.

This could very well be the start of a bigger rally – especially with growing tensions.

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