Bitcoin’s relatively low volatility may have a lot of traditional bulls turned off but all along we and many other analysts have said that a day would come when Bitcoin has shed its volatility. Just like a fraternity brother graduating from college would enter into the real world as a productive member of the economy, leaving its keg stands and one night stands in exchange for a career and family.
The fact that Bitcoin’s maturity to a stable and truly viable asset is furthering that evolution amidst chaos among all major markets domestic and abroad is truly fascinating. In fact, in the early onset of the pandemic in America that caused a crash in equities, precious metals as well as Bitcoin showed us how BTC was still tied to equities. But the timing of the correction as well as the correlation afterwards showed how Bitcoin had now started to trade in tandem with gold. This is more evidence that it is being perceived as a safe haven.
This is increasingly important due to the massive global relief effort through the action of central banks worldwide and the massive amounts of debt that countries are taking on will inevitably prove to devalue currencies across the globe leading to worldwide inflation. Gold is the king of protecting wealth during inflationary periods, but the up and coming heir to the thrown has to be Bitcoin.
Since we have never experienced a global period of hyperinflation other than after world war two and it is not a far stretch to say that we could easily reach WWII levels of economic and mortal devastation.
This would have a profound impact on the price of Bitcoin as well as traditional safe haven assets that will slowly be outdated. This is not to say Gold will not increase its value by leaps and bounds but simply in this new era the many advantages of Bitcoin vs gold such as, easier and cheaper to store, easier and cheaper to send or receive, easier to spend (especially in coming years, decades) will put it ahead of traditional safe haven assets. Especially in a pandemic were as physical currencies may be hosting covbid-19.
So although today’s 2.3% gain in BTC futures is welcome it is not as bullish as the fact that since the end of May we have seen BTC prices trading in a stable range from $9,000 - $10,000 currently smack dab in the middle of that range currently at $9,505.
The longer we see this stability amidst chaos across all other markets the more we can expect Bitcoin to take a bigger piece of global investing and wealth preservation.