Gosh darn it, bitcoin! You were doing so well and now you’ve decided to go and disappoint everyone… Again!
Bitcoin Takes Another Nasty Tumble
At the time of writing, the number one cryptocurrency in the world by market cap has fallen to just a little over $8,800. This is about $500 less than where it was trading yesterday, and about $1,600 from where the currency was trading roughly two weeks ago.
The fears of the coronavirus are spreading almost as fast as the disease itself. People are stocking up on canned food and water as a means of protecting themselves should things get ugly. If this turns into a worldwide pandemic to the point that people cannot leave their homes or need to stay indoors as things get straightened out, they want to make sure they have what they need to stay cool and survive.
The virus isn’t just affecting bitcoin. The Dow Jones closed at more than 1,000 points less yesterday, and stocks are being driven hard into the ground. To be frank, things aren’t looking good, and international leaders like President Donald Trump of the U.S. are now holding press conferences to inform citizens how their administrations are looking to ease the growing threat.
There’s another big problem that bitcoin is facing and that is that not everyone sees it as a “safe haven” asset designed to protect wealth during times of economic strife. At press time, this attitude makes more sense considering we’re incurring a harsh period right now and bitcoin has done nothing but tank and let us down.
Some analysts have long compared bitcoin with precious metals like gold, saying it can work wonders and potentially keep your net worth stable during periods of economic uncertainty, but that doesn’t seem like the case this time around. In addition, several other analysts scoff at this attitude, saying gold is not even close to gold in terms of its value or general properties.
Jeff Dorman – the chief investment officer of the crypto firm Arca – says it’s downright “irresponsible” to think of bitcoin as a potential “safe haven” and goes so far as to say it will never be on the same level as gold. He explains in a statement:
It’s irresponsible for anyone to say that bitcoin is truly a ‘safe haven.’ Look at how gold and Treasuries and equities react instantaneously to global fears. Bitcoin and digital assets live outside that workflow.
40 Percent of Gains Washed Away
And to an extent, Dorman has a point. Cryptocurrencies are designed to move against the mold. They don’t follow the same rules, and thus will react differently to certain economic conditions and are likely to behave differently during times of trouble.
At press time, bitcoin has lost nearly 40 percent of its 2020 gains.