CNBC: Risky Or Not, Bitcoin Is Outperforming Other Financial Assets And Is Predicted To Continue
Risky As It Might Be, Bitcoin Is Outperforming Other Financial Assets And Is Predicted To Continue
Generally, the market is still very excited about Bitcoin and there is a growing enthusiasm about the asset’s prospects in the near future. After an uncomfortable crypto winter that started last year and continued past the first quarter of 2019, Bitcoin eventually picked up, surged and has been performing quite impressively since then.
A few days ago, Bitcoin successfully hit $9,000, crossing it a little to complete a whopping 60% increase. Even though there’s been a significant pullback, this surge is more than $3,000 in the space of about a month and also at least two times the value it began the year with. Even though it is still a long way from its near $20,000 all-time high, it has performed much better than any assets in any of the world’s financial market, whether cryptocurrency or traditional.
Economic Effects Influencing Bitcoin Growth
Recently, Bart Smith spoke on the different reasons why Bitcoin was able to do the numbers it did. Smith, who is currently the Head of Digital Assets at Susquehanna, emphasized greatly on the economic stiffness currently being experienced between the United States and China. The two economic giants have been having a trade feud which will probably not be settled anytime soon.
Smith explained that the Yuan is falling as a result of the disagreement, making Chinese business people look in the direction of Bitcoin. Speaking on the Squawk Box segment of CNBC, Smith said:
“The first net effect of the trade war with China and the U.S. is that the Yuan is hitting a six-month low. Bitcoin was either a hedge or just an outright way to get capital outside of that country.”
Even though the rest of the world’s financial markets haven’t exactly begun to feel the brunt of the trade war, there is a lot of worry that a time will soon come, when the effect on the market would be almost impossible to ignore. This trade problem, as bad as it seems for other financial markets, would be fantastic for Bitcoin.
Jeff Dorman, the Chief Investment Officer at Arca – a digital asset management firm – has supported this view, predicting that the Yuan might take a hit. Speaking on the matter, Dorman said:
“Chinese investors and the overall population know this and are worried about protecting their capital and their purchasing power. This leads to capital outflows and Bitcoin and other digital assets are a safe haven for them.”
Bitcoin Will Not Be A Payment Currency
There are some people who generally believe that Bitcoin just might never become the most popular mode of payment many hope it will be. Instead of that, they expect the asset to be a more popular and trusted store of value, offering more trust than gold.
Galaxy Digital’s Head of Cryptocurrency, Michael Novogratz, has said that “Bitcoin is not going to be a payment currency – it’s going to be just like gold.”
Fidelity Investment through their Fidelity Digital Assets platform is set to begin trading Bitcoin to customers very soon. Even though it will initially be restricted to institutional clients, Brian Kelly, who is the founder and CEO of BKCM, has said that many investors are already expecting substantial demand from the firm.
Bart Smith seems to agree with this as he also expressed that:
“There’s tremendous optimism about online brokerages offering bitcoin to retail customers in 2019. I think people are buying Bitcoin ahead of that new investor demand.”
Bitcoin Trading Risk
A recent study carried out by Bitwise concluded that only 5% of spot Bitcoin trading volume is legit and not doctored by exchange firms. According to the study which examined more than 80 of the largest crypto exchange firms, only $273 million out of a reported estimate of $6 billion was found to be genuine.
Reports like this fuel skeptics and naysayers who do not have a lot of faith in crypto. As Nouriel Roubini, popularly referred to as “Dr. Doom” said, cryptocurrencies are the “mother and father of all bubbles.”
Smith has however spoken on the risk associated with the market. He said:
“It’s risky and risk in and of itself should have returns associated with it. The question is, do you understand the risk and are you taking the appropriate amount.”
Bitcoin (BTC) Live Price
1 BTC/USD =$40,898.4463 change ~ -9.05%
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