Is Bitcoin More Stable Than Thought?
Traditional markets, such as gold, oil, stock and bonds have been thought to have been a relatively 'safe' market. Cryptocurrencies and Bitcoin (BTC) on the other hand, have been considered volatile assets by most. It seems that after today, the tables have turned.
Bitcoin, Oil & the Markets
During the past 24 hours the price of WTI crude oil has collapsed by roughly another 45% making the price per barrel $10.72 currently. Oil's price has been declining since March when the price was $47 per barrel. This is a 77% price decline and the cheapest rate oil has seen in decades.
Bitcoin and cryptocurrencies on the other hand have been faring much better. BTC is trading currently at $7,085, which is not too far off from its price before the Covid-19 pandemic which hovered slightly above $8000.
With oil trading below $11, one Bitcoin could purchase 648 barrels of oil.
Bitcoin and most cryptocurrencies seem to be in recovery mode which is oddly mirroring most indices. This includes the NASDAQ, S&P 500, and The Dow Jones to a certain extent which have been recovering from the Covid-19 crash.
Back to Normalcy?
It seems that the recovery in the markets, including cryptocurrencies is dependent on the pandemic. As the western world is slowly ending many lockdown orders, the markets seem to react favorably. We could quite possibly see Bitcoin at in the $8000 - $9000 range within the next few weeks, to pre-pandemic levels.
Bitcoin could potentially go even higher as the halving event which occurs every four years is about to take place in 20 days. This will increase Bitcoin's scarcity as miners that maintain the network will receive half of the block rewards. In the 2020 halving will reduce the rewards from 12.5 to 6.25 BTC.
The only catch is that Bitcoin's price, and the price of most indices seem to be linked to global health.
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Written by Jonathan Ganor
Writer & cryptocurrency aficionado