What Impact Would a Second Wave of Coronavirus Have on Bitcoin?
What kind of effects could a second wave have on the cryptocurrency markets?
The financial markets have been bracing for the impact of a second wave of Coronavirus. But what about Bitcoin? What kind of effects could a second wave have on the cryptocurrency markets? If the crypto markets haven’t broken free from the habit of short term correlation with the legacy markets, then we can expect a hard but short contraction.
The crypto markets generally become more volatile before an energetic bullish period, however, these short term events that cause price adjustments are not a big cause for concern as there are a few positive macro trends which are likely to win out in the long term.
BTC (and the marketplace it birthed) has proven to be a good place to park your value despite record breaking economic downturns as it has bounced back faster and higher than anything else the markets have to offer.
Bitcoin meets most of the criteria for a store of value, with the one caveat being that it may not meet the criteria of being “predictably useful when retrieved,” at least not in the current market’s level of maturity. Taking the long view, BTC has proven to be a tremendous store of value albeit only for anyone capable of riding out the 2+ year long bear market season BTC’s natural market cycle is known for.
Therefore, given current market conditions, and taking into account where BTC is in its market cycle, BTC will likely come out as one of the best stores of value any market has to offer. I fully expect many down market crypto options to outperform BTC during this building bullish wave of new money and new interest.
More importantly, BTC is in the “fun” phase of its four-year cycle, where steady gains simply become part of the new normal. Nothing has yet proven to derail this larger cycle, not even the kind of global market instability we can expect from a second peak in COVID-19 related deaths.
"...given current market conditions, and taking into account where BTC is in its market cycle, BTC will likely come out as one of the best stores of value any market has to offer"
EDWARD DELEON HICKMAN
CEO & Founder