Bitcoin Price is Rallying While it Left Stocks in the Dust
Bitcoin (BTC) prices are gaining today. It went higher by approximately 20% as the major stock indices experienced considerably weaker gains. The most famous cryptocurrency surged to $6,393.76, based on CoinDesk data.
With this, BTC rose 19.8% for the day. Also, it was up over 60% from its latest low of less than $3,900 reached last March 13. On the other hand, major U.S. stock indices have not given any reports of compelling gains today. The S&P 500 Index and the Dow Jones Industrial Average has only climbed less than 1% since the opening.
London-based digital asset Bequant’s head of research Denis Vinokuorov stated, “A combination of factors is driving the market higher today.”
Notably, he indicated the profit-taking flow in the options market and several degrees of stabilization of the liquidity conditions. And this is with the cost of liquidity further coming off the extreme levels observed during the recent sessions.
Aside from that, he pointed to the vastly different performance of Bitcoin and stocks. These two are falling together recently.
Vinokourov explained, “While Bitcoin may have been trading in lockstep with risk assets and in particular S&P 500, it is not the first that the digital asset has established some degree of correlation to traditional assets.”
According to Vinokourov, the correlation happens to be short-lived every time. “This deviation is another win for an asset that prides itself on its non-correlated and asymmetric performance,” he said.
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Binance U.S. CEO Catherine Coley also weighed on the latest changes in the global asset markets.
She noted, “Last week’s nosedive in crypto was part of a universal rush to cash among investors in response to unprecedented panic and uncertainty.”
Nevertheless, Coley said that the appeal of Bitcoin as a safe haven and the deflationary asset is once more apparent amid the raft of fiscal and monetary stimulus from governments and central banks across the globe. This reminds investors of how dangerous the existing financial system really is.
In addition to that, Bitfinex’s and Tether’s CTO Paolo Ardoino went on with a different tack. He explained recent events as providing validation for the whole space. Also, Ardoino believes that the blockchain industry has the power to survive tremulous current events.
He stated, “The current situation shows that the global economy needs transparency and blockchain.”
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Japan in Digital Yen
Meanwhile, amid the financial turmoil caused by the coronavirus outbreak, countries are further thinking of the adoption of a central bank digital currency (CBDC).
During an interview, Liberal Democratic Party (LDP) Member of the House of Representatives Kozo Yamamoto insisted that Japan must implement a CBDC immediately.
Moreover, a key figure behind Abenomics, Yamamoto referred to three traditional roles of money as a unit of account, a store of value, medium of exchange. For him, giant corporations such as Facebook should issue tokens and control the store of value and medium of exchange.
But the LDP member stated that the government must control the unit of account. If not, average people would forget about traditional fiat currency.
Also, Yamamoto highlighted that digital yen could play as a sort of bridge currency between other digital currencies.
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