Bitcoin Decouples From Stock Market, Coronavirus Fears Remain
Despite the rumors, Bitcoin is far from dead. Even though it has taken a beating recently, BTC’s reaction to the culmination of current events shows exactly why cryptocurrency is here to stay.
It was another wild week in the world of crypto as the price of bitcoin (BTC) snapped back from 10 month lows, gaining a relieving 14% over the last 7 days. The rest of the crypto market followed suit, with many top tier coins roaring back with double-digit gains. As of Friday morning, Ethereum (ETH) was up 13%, Ripple (XRP) up 9%, Bitcoin Cash (BCH) up 20%, and Bitcoin SV (BSV) up 29%. The stock market, on the other hand, did not manage to fare as well, teetering along break-even across the week, even after news of Donald Trump’s stimulus package plan was the talk of the internet.
The term “decoupling” has been exploding in popularity across crypto Twitter, in reference to the advent of the price of bitcoin finally breaking free from its correlation with the stock market. Whether or not the two have gone back to moving completely independent of one another remains to be seen, but for now, it would certain appear to be the case, pointing to a bullish case scenario for cryptocurrency markets. Certainly, some key conditions seem to be in place for bitcoin to continue its long-term upward trend; most notably 1) an increased need for a deflationary asset due to massive printing of currency fiat, and 2) the fact that the long-awaited halving event remains just around the corner.
HUGELY bullish dynamics for Bitcoin right now:
– BTC flat during HISTORIC risk-off days in markets.
– 72% on Coinbase buying.
– The Halvening is 50 days away.
– Billions in buys coming when levered longs return.
– And if 1% of >$2T+ of stimulus finds its way to Bitcoin…
— Hunter Horsley (@HHorsley) March 18, 2020
The coronavirus has taken its toll on the health of not only individuals afflicted by it, but stock markets around the world, the economy, and of course the crypto markets as well. Hundreds of millions of people are currently under lockdown-type conditions, unable to leave their homes except to buy essential items or go to the hospital. Millions of jobs have also been suspended, with several hundred thousand cancelled altogether. Governments are hurrying to enact legislation in as wise a fashion as possible in order to minimize spread of the virus while keeping their economies afloat.
The world is in the midst of the throes of an epidemic that is unlike anything witnessed in modern history, and while things are quite serious, the resiliency of bitcoin and the crypto market has managed to shine through. In addition to the 2 mentioned above, several other elements are at play keeping the price of bitcoin at float. For one, BTC (and crypto in general) will come in handier as a means of payment while people are not transacting cash hand-to-hand. Another is that with increased indoor-time comes a higher percentage of internet users, and thus a higher interest in cryptocurrency. Indeed, several of the Bitcoin network’s core features are now working to its advantage in a time of crisis, thus helping its case to act as a legitimate store of value.
No, Bitcoin as a store of value isn’t dead just because it had a super shitty day. No, Ethereum and defi aren’t dead just because they had a super shitty day. In the coming months the world will see what anti-fragile means.
— Erik Voorhees (@ErikVoorhees) March 13, 2020
Here is a rundown of some recent news items that link together Bitcoin and the coronavirus, even if they are just tangentially related.
- Federal Reserve cuts interest rates to near 0%. The U.S. Federal Reserve made it easier for businesses to borrow money than ever before, effectively cutting interest rates to zero in response to the coronavirus panic. In addition, they have also purchased over $700 billion in U.S. treasuries, surpassing that injected into the economy during the quantitative easing (QE) of the last recession. In some cases, interest rates actually fell below 0% for the first time in U.S. history.
Negative interest rates have arrived in the US! 6mo t-bill at -2bps. Means you need to PAY US govt for 6mo cash deposit. Rates to go much more negative to weaken dollar. This is confiscation and it is bad but it needed for now to stabilize system. Mega bullish for #Bitcoin pic.twitter.com/mwgEhnXKsD
— Dan Tapiero (@DTAPCAP) March 19, 2020
- IRS delays tax filing deadline extended from April 15 to July 15. This year, all Americans will be getting an extra 3 months to file their taxes this year for their earning in 2019, which can be used by crypto holders and traders to plan exactly how they will navigate reporting their crypto-related activities. As things currently stand, all crypto activity must be reported, which includes everything from buying a cup of coffee to exchange-to-exchange transactions.
Today I’m calling on the IRS to move our tax filing deadline to never because taxation is theft. https://t.co/HW5xPl86HK
— ⚡️Crypto Roth₿ard⚡️ (@CryptoRothbard) March 16, 2020
- Senator Kelly Loeffler accused of insider trading. A recently-elected senator from Georgia, Kelly Loeffler, reported sales of somewhere between $1,275,000 and $3,100,000 in stock in the days and weeks after a meeting between senators addressing the coronavirus. The senator is being accused of using confidential information gained while in office to avoid the brutal Wall Street sell-off that occurred this month. The relationship between Loeffler and Bitcoin is that she was at one time the CEO of the bitcoin futures exchange Bakkt. Her husband is Jeffrey Sprecher, CEO of Bakkt owners ICE, and chairman of the NYSE. Sprecher has a 1.6% share in Bakkt, giving him an estimated fortune of about $500 million.
If you find out about a nation-threatening pandemic and your first move is to adjust your stock portfolio you should probably not be in a job that serves the public interest.
— Andrew Yang🧢 (@AndrewYang) March 20, 2020
- Virus prompts new breed of crypto scammers. Over the course of the last month, several new bitcoin and crypto-based scams have taken form hoping to capitalize on the coronavirus. One such scam involves a mass emailing by scammers posing to be affiliated with the World Health Organization (WHO), asking for donations in the form of BTC. Other such scams involve the creation of cryptocurrencies using the virus as a name, most of which are asking for purchases as a means of donation to combat the virus. In addition, a covid-themed ransomware infection named “CovidLock” has also been appearing on computers, demanding $100 in BTC in order to receive a password that supposedly decrypts the computer.
The scammers impersonating the @WHO COVID-19 Solidarity Response Fund are evolving. First samples seen on 16 March and have put a bit more spit and polish on the 18 March run. Please donate to the real fund here: https://t.co/MfggnADyKF pic.twitter.com/FVwbbSmN4e
— Chester Wisniewski (@chetwisniewski) March 19, 2020