The crypto press is flooded with theories about the causes of the bitcoin price surge and bitcoin bull, Max Keiser, has added another one. He has suggested that the rally, which has seen Bitcoin hit another high for 2019 was likely caused by the likelihood of political chaos following the European Union parliamentary elections, which were held over the weekend.
He tweeted on 26th May: “Bitcoin rallies to 2019 highs as EU elections indicate extreme political chaos ahead.” What he is suggesting is that bitcoin had assumed a safe haven role, becoming the go-to asset when risk rises, a role traditionally played by gold.
The EU election results, which were published in total yesterday, indicate greater party fragmentation. While the center-left Democrats and Progressive Alliance of Socialists as well as the center-right European people’s Party garnered the most seats, their combined numbers will not be enough to form a majority.
Keiser fears that the reduced dominance of the of the moderate parties alongside the gains made by the far-right nationalist parties could result in chaos. This is because for the pro-EU parties to shape legislation and assign key jobs in the European Commission, they will require support, and this could give the Euro-skeptics a greater voice than before.
As CCN points out, this is not the first time that a bitcoin rally is being tied to geopolitical events. After the cryptocurrency crossed above $8,000 for the first time this year, there were suggestions that the rally was driven by trade tensions between the United States and China. Furthermore, a Forbes article earlier this month suggested that the Chinese, are turning to the ‘digital gold’, driven by fears that the trade war will be damaging to both the yuan and the dollar. The Forbes article also claims “a sliding yuan tends to be bitcoin positive.”
Barry Silbert, founder and CEO of Digital Currency Group, supports this thinking. He has said, “It’s certainly interesting that that the price [of Bitcoin] started its acceleration, moving up and to the right, when the trade discussions broke down.” He also said that the price of Bitcoin rose after the UK voted to leave the EU in 2016 and during Greece’s attempts to exit the EU.