Bitcoin news: Price hit by dramatic value fluctuations amid coronavirus panic buying and selling

Bitcoin has experienced wild price swings in recent days as cryptocurrency markets respond to the global economic uncertainty sparked by the coronavirus epidemic.

The cryptocurrency has swung between highs of $9,000 and lows of 4,000 since the start of March, representing the most severe price volatility since the market explosion and subsequent crash in late 2017.

Over the last week the value of one Bitcoin has risen by more than $1,000 to its current price of $6,600.

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The latest price rise came after the US Federal Reserve announced unlimited quantitative easing measures to help reduce the economic impact of coronavirus.

This follows similar announcements from other central banks like the Reserve Bank of Australia and the European Central Bank to artificially increase the money supply.

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Such drastic economic policy is seen by some analysts as a potential opportunity for investors, who may consider Bitcoin as a safe-haven asset due to its decentralised nature.

The limited supply of Bitcoin – only 21 million will ever exist – means it is also immune to quantitative easing and other emergency monetary measures that fiat currencies are susceptible to.

“The US Federal Reserve’s announcement effectively pumps billions of dollars into the market, so some investors may be weary that the dollar will lose its value, and are moving back into Bitcoin to hedge against inflation,” Simon Peters, a cryptocurrency analyst at the online trading platform eToro, told The Independent.

“Because the amount of new Bitcoin that comes on to the market decreases over time, it is by design a deflationary asset when compared with a fiat currency like the US dollar. In theory the value per Bitcoin should increase over time.”

Other major cryptocurrencies continue to experience similar fluctuations, though the full extent of the impact the coronavirus outbreak has had on markets is yet to be fully realised.

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