Bitcoin’ Bull a Disillusion Amid Possible Financial Crisis?
Global financial assets have been sold off since last week, worries about a new round of global financial crisis spreads.
The top cryptocurrency bitcoin is often touted as a good store of value (still its best use case, according to bitcoin believers) and a safe-haven asset to hedge against economic uncertainty and market volatility.
However, Bitcoin is not behaving like a “store of value” this week, it has fallen from $9187 to $7638, about 16.86%dump since the early morning of March 8. Bitcoin investors can do nothing but rest their hope on the upcoming halving.
Now it’s only 60 days before the halving. Whether bitcoin is a safe-haven asset or digital gold? Whether bitcoin can survive the global stock crash? whether the halving market will come? For these questions, 8btc interviewed KOL in China.
Does the global stock crash mean the global economic crisis in essence?
Johnson Xu, chief analyst of TokenInsight:
“The spread of COVID-19 is the main reason for the stock crash. In fact, two years ago, the signs of global financial recession have emerged.”
Li Minyu CMO of Chainext:
“Whether a new round of financial crisis will happen depends on the control of the COVID-19. The faster the virus disappears, the less likely the financial crisis will be.”
“In fact, we can observe some signs in February this year. For example, the U.S. Treasury bond yield hangs upside down, and the growth rate of U.S. net exports and government spending exceeds that of residents’ consumption and investment. In 2000, there were similar pre-indicators among the Internet bubble, 911 incident, and 2008 financial tsunami.”
Is bitcoin alone amid the global stock crash?
“Bitcoin’s current relevance to traditional financial markets is very low. Bitcoin, along with traditional financial markets, fell sharply this time for the following reasons:
First of all, the crypto market has risen by about 40% since January 2020, exceeding the expectations of some investors, and a significant correction is normal and healthy. Instead of buying these safe-haven assets, people will turn to cash among the crisis.”
“For more than a decade after the financial tsunami in 2008, bitcoin was considered a safe haven asset at some time. Now, we tend to regard it as an alternative risk asset. On October 11, 2018, Bitcoin also fell 4.5% as U.S. stocks crashed 4% that day. If the risk preference of the investors is the same, their behavior will tend to be the same.”
“Halving is the expectation that everyone in the crypto space knows. When everyone is crazy about thinking that something will come true, it may not come true. Take the halving of the Litecoin as an example. After its halving in 2019, Litecoin’s price dumped as well as the computing power.”
“Now there are about two months before the halving. I don’t think there will be a pump before the halving. Looking back at November 2012 and July 2016, in the first four months before halving, bitcoin was basically sideways or rose and fell. From January 2020 to now, the market has experienced a medium-sized “bull-bear transformation”, which is in accord with past history. If bitcoin can consolidate at the bottom for a long time after the halving in May this year, it is likely to open a new round of bull.”
Liu Qing, analyst of QKL123:
“It’s time to test bitcoin as central banks cut the interest rate. The current decline in bitcoin price is mainly driven by panic in the capital market. Before halving, there may be an increase trend and there probably be a two-year bull after halving.”