16.05.2021

Bitcoin Won as Store of Value in Coronavirus Crisis

Since February, BTC/USD has delivered stable returns of 0.6%, Kling said, smoothing out any pain to “hodlers” sparked by one of the most unnerving financial implosions of recent history last month.

Bitcoin has in fact functioned very well as a store of value before the coronavirus crisis, raw data suggests.

In a Twitter discussion on May 1, Travis Kling, head of crypto hedge fund Ikigai, produced fresh evidence that, despite volatility, Bitcoin has preserved its investors’ wealth.

BTC protected hodlers from “catastrophic event”

“The price of #Bitcoin increased 0.60% from the end of February to the end of April amidst one of the most catastrophic economic events in history”, he summarized.

A store of value.

The narrative of Bitcoin as a store of value in its current state has undergone a metamorphosis since the start of 2020.

After the March crash, the largest cryptocurrency has in fact seen periods during which it was less volatile than traditional markets, including stocks and oil.

Signs of a gradual decoupling from market price movements further reinforce a positive outlook for Bitcoin as a long-term wealth preservation tool.

Macro assets year-to-date returns
Macro assets year-to-date returns. Source: Skew

Pantera CEO: BTC will “come of age” in 2020

Responding to Kling, criticism of Bitcoin from Bloomberg editor Joe Weisenthal, who contended that the U.S. dollar was more stable, saw a swift putdown.

As both Kling and previously Cointelegraph noted, the dollar’s huge inflation relative to Bitcoin logically no longer allows it to compete for the store of value title.

Bitcoin’s inflation rate will drop to 1.8% in around two weeks’ time as its third block reward halving takes place.

Year to date, meanwhile, data from monitoring resource Skew confirms that Bitcoin is the best macro asset play, even beating gold.

On that topic, Dan Morehead, CEO of Pantera Capital, summarized this week:

Bitcoin was born in a financial crisis.  It will come of age in this one.

Bitcoin Will Beat Dow Jones to 40,000: Tom Lee Doubles Down on BTC

Bitcoin is going to reach 40,000 before the Dow Jones does, according to the analyst eyeing a 200% price jump by August 2020.

Speaking to CNBC in an interview on Feb. 10, Fundstrat Global Advisors co-founder, Tom Lee, said that although the Dow would hit 30,000 points before Bitcoin hits $30,000, 40,000 was a different story.

Lee: ‘I would not pick the Dow’

The Dow currently trades at 29,280, an all-time high, while BTC/USD is at $9,870 after hitting five-month highs of $10,150 over the weekend.

Lee summarized:

“My guess would be Dow, but if I had to say what is first to 40,000, I would… I would not pick the Dow.”

“Yes, @fundstrat just said he thought bitcoin could almost triple this year & beat the Dow to 40k”, host Kelly Evans confirmed.

$4K or $27K for BTC?

Earlier, the infamous Bitcoin bull said that due to the cryptocurrency breaking resistance provided by its 200-day moving average price, it was due to treble in just six months.

That forecast sparked contention from other traders, who told Cointelegraph that such optimism was still misplaced.

Nonetheless, after rising 40% year-to-date, Bitcoin has seen a new wave of price predictions from well-known figures hit the airwaves.

Most recently, Trading Bitcoin podcast host, Tone Vays, warned the short term could produce as low a price as $4,000. Contrasting him are the likes of fellow veteran Peter Brandt, who believes those waiting for even $6,000 have “missed the bottom.”

As Cointelegraph reported, PlanB, creator of the highly accurate stock-to-flow Bitcoin price model, shares the view that BTC/USD will remain higher – at least $8,200 before hitting a giant $100,000 by the end of 2021.

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