Well, it seems analysts are now saying that bitcoin has failed to live up to our expectations. The currency, despite the harsh trade war conditions that should have put it in a top spot on the financial map, has really failed to rally the way many industry experts thought it would, and at press time, many are hoping the currency can turn itself around before 2020 shows itself.
Bitcoin Ain’t Doing So Hot
In August, trade war conditions were at their worst. The U.S. and China were at each other’s throats, with President Donald Trump invoking tariffs on $300 billion new imports from our eastern neighbor, while China swore to retaliate and threw new tariffs of its own into the mix. It was an ugly game of who’s stronger than who, with many claiming that average, everyday citizens would eventually get caught in the middle.
For the most part, it’s not necessarily people who have suffered from the trade war, but rather the retailers. Companies like Walmart, which have been warning customers that prices on all China-based goods are likely to experience price spikes in the coming months, meaning people will soon have to pay more for the items they likely use regularly.
At the same time, many believed that currencies like bitcoin would ultimately shoot up and experience bull rallies unlike anything we’ve ever dreamed. In these kinds of conditions, fiat and traditional stock markets tend to lose some of their ground. People begin to put all their money and wealth into non-traditional assets; things like gold, and in this case, bitcoin, which some are beginning to see as “digital gold.”
While this may have happened for a little while, the currency never quite reached where we thought it would. Now, analysts are weighing in on the situation, discussing what could have gone wrong and where the coin will move to in the coming weeks.
Jeff Dorman, chief investment officer of asset manager Arca, explains:
August began with a 20 percent rally in bitcoin led once again by the same macro factors that have supported it for most of this year – endless rate cuts from global Central Banks, declining currencies including the critically important Chinese Yuan, a series of Trump tweets about tariffs and reckless monetary policy, a nasty decline in equities, and, of course, the potentially significant impact of a no-deal Brexit. Unfortunately, the perfect macro storm was erased throughout the rest of the month as these negative correlations broke down and bitcoin and other digital assets ended the month in the red.
Things Haven’t Gone Our Way Lately
Joe DiPasquale, CEO of crypto hedge fund Bit Bull Capital, echoed this sentiment, commenting:
While global economic factors have served as precursors to bitcoin price movements recently, they have not had any lasting impacts.