Shares are rising, the price of gold is high, will Bitcoin follow?
During the past month, when the corona virus continued to wreak havoc on the economy and markets, record-breaking slumps in stocks, gold, bitcoin and other cryptocurrencies have occurred.
However, yesterday and today, several stock indices rose sharply and the safe haven gold has returned to its previous highs. Is Bitcoin the next asset to experience a massive upswing?
After record-breaking losses due to a global pandemic and the resulting panic sell-off, the assets are finally showing signs of recovery.
Yesterday, when the stock market was opened, important US stock index futures such as the S&P 500 and Dow rise sharply. The strong upswing is due to the fact that the government has published more information about the stimulus packages.
US stocks limit up. Gold back to the highs. That escalated quickly.
– Alex Krüger (@krugermacro) March 24, 2020
In addition to the stock market, the gold price has risen again and reached the all-time high before the historic slump. While the stimulus packages are positive on the one hand to protect the economy from further dangers, the printing of money essentially causes massive inflation against which gold is best hedged due to the relative scarcity of the asset.
Bitcoin is often referred to as digital gold because the asset has a digital shortage and other important properties that are similar to the precious metal. Bitcoin was designed to be deflationary and only 21 million BTC can exist.
As more and more fiat currency comes onto the market, purchasing power is reduced. The falling value of fiat money can in turn lead to an increase in bitcoin prices.
Will Bitcoin Bloom Before Halving?
This is certainly possible and since the value of the fixed assets will halve in less than two months and the supply will decrease, the value of the cryptocurrency could skyrocket.
Of course, it is not yet clear what damage the “Black Swan” event (coronavirus) will ultimately cause to the economy and since Bitcoin is a high-risk, speculative good, its value could very well decrease during such a chaos.
The coming days will be particularly insightful to understand whether the market is ready to recover or whether this is just the calm before the actual storm.
Proof of text: newsbtc
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