Bitcoin is still far from a real "safe haven asset"
Entering March, the new crown pneumonia epidemic has triggered concerns about a global economic recession, and it continues to spread. Investors are selling as much as they can to preserve their holdings, sending the dollar soaring.
The Bitcoin 312 incident caused it to experience a rapid decline, falling from nearly 8,000 US dollars all the way to 3,600 US dollars, a drop of nearly 50% at one point, and then repeatedly oscillating between 4,000 US dollars and 6,000 US dollars, constantly stimulating the nerves of crypto investors.
After the Federal Reserve launched the "unlimited QE" policy, Bitcoin once stood at $6,600.
What is QE?
QE is commonly known as quantitative easing. It is an unconventional monetary policy that the central bank uses to purchase bonds and securities to release money into the market. The central bank increases the supply of base money by purchasing medium and long-term bonds such as treasury bonds and injects a large amount of liquidity into the market. Therefore, when the market is in crisis, quantitative easing can avoid the dilemma of insufficient liquidity in the market and the collapse of all products.
Bitcoin has returned to above $6,000, and some people in the market shouted "the turning point has arrived", is it true? Then, can Bitcoin still become a "safe haven asset" under the financial crisis?
Goldman Sachs commodities researcher Jeffrey Currie said in a research note that gold has reached an "inflection point" after the Fed announced it would buy unlimited amounts of mortgage-backed securities and U.S. Treasuries.
Galaxy Digital CEO Mike Novogratz also predicted that Bitcoin could follow gold in a significant price breakout, primarily because both assets are inherently scarce.
Xu Yingkai, the founding partner of BlockVC, said on Weibo that the $3,800 price of Bitcoin is likely to be the bottom of this round of decline in the market. The market will start to fully recover within 1-2 months after the Bitcoin halving. After the completion of the halving, due to the cliff-like The reduction in income will focus on eliminating a wave of miners, but the daily new market selling pressure has also doubled year-on-year, and the "death spiral" is expected to gradually weaken.
Some people in the industry pointed out that "safe haven assets" is an old concept, but considering the vast market of Bitcoin and its liquidity is much stronger than other traditional varieties before, the future demand will definitely continue to rise. Therefore, after the sharp drop, Bitcoin will definitely recover faster than traditional assets in the United States. From this point of view, Bitcoin still has a better prospect, but judging from the current market, it is not a safe haven.
In fact, after Bitcoin’s short-term plunge, this price is very attractive in the medium and long term, and it may be the starting point of the next round of bull market.
Some people believe that Bitcoin has been consolidating in recent days, and the volatility has become smaller and smaller. This shows that the wait-and-see sentiment in the market has reached the extreme, and it is not far from breaking the consolidation. Therefore, from an investment point of view, the Bitcoin market is still optimistic.
However, some people pointed out that it is not yet time for Bitcoin to buy bottoms. The logic is that Bitcoin is dominated by Americans, and the U.S. stock market has not yet fallen to the bottom. A lot of black swans haven't come out yet.
Therefore, there should be a very high probability that it will continue to have problems, and it may drive Bitcoin to fall further. Investors can look at it more cautiously for a while.
In fact, we must also clearly realize that although Bitcoin started to rise in a straight line due to the Fed’s monetary policy, it can only be regarded as a rebound at present, and further observation is needed for the reversal. As for opportunities that may appear at any time, but still the old saying, investment is risky, you must be cautious when entering the market, do a good job in risk control, and do what you can.
