Skip to main content

BITCOIN AND THE CURRENT GLOBAL MARKETS CRISIS: INDEED A SAFE HAVEN?



Traditional stocks are marking yet another day of steep declines. This comes a few days after US President Donald Trump said that he’ll impose a 10% tariff on an additional $300 billion worth of Chinese goods intended for import to the US. Amid tumbling markets, Bitcoin gained upwards of 28% in a few days, causing many to believe that it can be viewed as a hedge. But can it really?



Traditional Markets Continue to Tumble



As Tech Tic Technologies reported last week, Donald Trump said that he will impose a 10% tariff on an additional $300 billion worth of Chinese goods. This catalyzed yet another wave of tension between the two largest economies in the world, casting traditional stock markets in the red.
It’s worth remembering that the US previously hit another $250 billion worth of Chinese goods with a 25% tariff.
A week later, it appears that the markets are still feeling the tension. The NASDAQ is down 3.67% in the last day, while the S&P 500 index is down 2.98%, having declined by 87,31 points.




Another major index, the Dow Jones Industrial Average (DJIA), is also down 2.9% on the day.
Amid these market conditions, Bitcoin is currently surging, causing many to believe that it can effectively serve as a hedge against traditional stocks. One such individual is Tim Draper, a popular Bitcoin proponent and venture capitalist.
Indeed, looking at Bitcoin’s performance, we can clearly see that the cryptocurrency has outperformed pretty much all of the traditional stock indexes substantially. Draper is not the only one to be emphasizing Bitcoin’s use as a hedge. Another popular blockchain investor and Bitcoin analyst, Oliver Isaacs, said:



What’s the Other Side of the Story?

Of course, there are also those who are making the case that Bitcoin might not be well-suited as a hedge investment against traditional stock markets.
Among the most common concerns are the lack of regulation, Bitcoin’s high volatility, as well as fears of market manipulation.
Naturally, it’s challenging to determine whether it’s reasonable to consider Bitcoin a safe haven amid bearish conditions in traditional markets.
However, looking at the numbers, it sure looks like it. This was noted by Anthony ‘Pomp’ Pompliano, who shared a simple yet definitive statistic:
Since Pomp’s tweet, Bitcoin has gained even more momentum, and it’s now up more than 280% YTD, making its performance relative to the S&P 500 even more impressive.

Comments

Post a Comment

Popular posts from this blog

Legendary Rock Star Gene Simmons Buys Cardano (ADA) Worth $300,000

Famous rock star Gene Simmons continues his cryptocurrency adventure, this time investing $300,000 in Cardano (ADA). Gene Simmons, the legendary KISS bassist, has made another dip into cryptocurrencies. The famous musician has expressed his belief in Cardano, presuming 2021 would be “the most productive year” for the altcoin. Believing in the Future of Cardano Rock star Gene Klein, aka Gene Simmons, has appeared in online social media with yet another pro-cryptocurrency commentary. This time KISS’s legendary bass guitarist has expressed his opinion on Cardano and its native digital coin ADA. In his  recent publication  on Twitter, Simmons explained one of his fundamental personal reasons for  investing  and holding the altcoin. The musician pointed out that he believes in Cardano because of Hoskinson (Charles) – Cardano’s creator and co-founder of Ethereum. In his tweet, the musician expressed his trust in the altcoin hopping on Hoskinson’s envision that 2021 would b...
Post a Comment
Read more

Bitcoin Hash Rate Hits All-Time High: Here’s How It Works And How It Affects The Price

Bitcoin intelligence, data, and analytics firm Glassnode found the Bitcoin hash rate hit a new all-time high over the weekend, ten days before the Bitcoin halving event. In other words, miners are putting more computational power into maintaining the Bitcoin network. Because miners must venture electricity and capital intensive computer processors to mine Bitcoin, the increase in hash rate is a bullish sign. It means miners are after the Bitcoin rewards they get from maintaining the network. And they’re venturing the resources to go after those rewards. Is The Bitcoin Hash Rate Correlated With The Price? In general, the Bitcoin price and the hash rate are not correlated. The price is what buyers and sellers agree to pay for one Bitcoin, and there are many factors – external and internal – affecting the price. However, there is a relation between the two. While the price goes up, it’s more profitable to mine, which likely to cause more miners to turn on their mining equ...
Post a Comment
Read more

Crypto News

Cryptocurrencies represent an internet-based medium of exchange that takes advantage of cryptographical functions in order to conduct financial transactions. They leverage blockchain technology to achieve decentralization, immutability, and transparency. According to the latest crypto news, there are thousands of cryptocurrencies in existence. However, the most popular ones include Bitcoin, Ethereum, Ripple, Binance Coin, Bitcoin Cash, Tezos, Tron, Litecoin, and EOS, acquire more than 80% of the total market cap. Decentralized cryptocurrencies such as Bitcoin, have one substantial advantage - no single authority can control them. Instead, they are governed by an algorithm that’s pre-programmed and defined. This takes away the human factor and makes the entire network transparent and immutable. Cryptos can be sent directly between two parties, in a rapid and cheap process, compared to traditional bank transfers. Since there is no central authority or a middleman, the users can go...
Post a Comment
Read more