However, today, multiple stock indexes limited up, and the safe-haven asset gold has reclaimed previous highs. Is Bitcoin the next asset to experience a massive pump?
Stock Market Futures Limit Up After Open, Gold Reclaims Previous Highs
Following record-breaking losses due to a global pandemic and resulting panic-induced selloff, assets are finally showing signs to a recovery.
Earlier today, when the stock market first opened, major US stock index futures like the S&P 500 and Dow hit their limit up maximum. The powerful surge is due to the government releasing more information about economic stimulus packages, and the spread of the virus starting to lose some pace.
US stocks limit up. Gold back to the highs. That escalated quickly.
— Alex Krüger (@krugermacro) March 24, 2020
Alongside the stock market, gold has been climbing once again, reclaiming the highs it was trading at before the historic collapse.
While the stimulus packages are positive for saving the economy for further danger, essentially printing money causes massive inflation, which gold is the most common hedge against due to the asset’s relative scarcity.
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Bitcoin is often called digital gold due to the asset having a digital scarcity and other important attributes that are similar to the precious metal. Bitcoin was designed to be deflationary, and only 21 million BTC can ever exist.
As more and more fiat currency is flooded into the market, it lowers the asset’s value. The falling value of fiat, in turn, can cause Bitcoin prices to rise.
And with stocks limiting up, gold reclaiming previous levels, could Bitcoin soon surge to back above $10,000?
Canceled By Coronavirus: Will Bitcoin Surge Ahead of the Halving?
It’s certainly possible, and with the asset’s halving in less than two months and the supply expected to diminish, the cryptocurrency’s value could skyrocket.
Of course, there’s no telling yet the damage that a black swan event like the coronavirus will ultimately do to the economy, and with Bitcoin being a high-risk, speculative asset, its value could very well go to zero during such chaos.
Bitcoin also has already nearly doubled in value since recent lows, suggesting that the asset’s recovery pump may have already happened.
Related Reading | Crypto Analyst: Digital Gold Narrative Out The Window Amidst Crisis
These recent surges, however, despite showing signs of recovery, may simply be bearish retests confirming previous support as resistance before the next leg down. The days ahead will be especially telling in understanding if the market is ready to fully recover, or if this is just a calm before the real storm ahead.
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