BTC - Keep calm and HODL on
As this crisis continues, bitcoin will eventually become a store of value again
Is bitcoin currently acting like a store of value, well no not really.
It lost 50% of its value in a matter of days, then it rallied some 50% in a matter of a couple more days.
Not the kind of volatility most would associate with a store of value.
However, I think the drop needs some context...
Based on what we are learning now, that big drop was likely the result of some shady things happening on Bitmex.
Bitmex is the largest derivatives market in all of crypto.
They offer up to 100x leverage and the volume they do is big.
Anyways, the big drop can mostly be traced back to massive liquidations taking place at Bitmex.
Bitcoin would liquidate large positions, fall lower, liquidate more large positions, fall lower, and it kept doing that all the way down.
According to Bitmex it looks like there was some sort of attack that was orchestrated by a sleeper that had been waiting to orchestrate this sort of water fall event for months.
Had Bitmex not shut down briefly, the price of bitcoin may have continued to fall all the way to zero, at least according to some.
Anyways, if that had never happened on Bitmex perhaps bitcoin would still be trading around $8k today and would very much be acting like a store of value in this risk off environment.
Given how poorly gold as well as everything else has also performed, I am not holding my breath.
That being said, I do still think that bitcoin will start performing better as we move forward.
The speculators are now out.
The stimulus plans are in full swing.
More and more money is being printed to keep everything afloat.
Once that money starts to make its way into the economy, bitcoin goes up.
Also, once we get through this, people will be looking for places to put their money back to work.
Bitcoin is in a good position for that as well.
I think it will look something like 2008-2010.
Initially gold and silver sold off with everything else as only the dollar went up.
However, as the bailouts rolled out, eventually gold and silver went on a massive run.
I fully expect something like to happen again this time around, bitcoin included.
Oh and there is that halving thing now less than 2 months away.
Stay informed my friends.
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-Doc
I agree with you that there are a lot of things creating selling pressure on Bitcoin right now. These futures contracts and other leveraged investments are worse then the MakerDao and Ethereum and will continue to be sources of volatility and selling pressure for sometime. Many, People are gamblers and now these vehicles allow them to gamble on Bitcoin, much to the detriment of price stability.
There is an article in Forbes magazine which suggests that there are a lot of new traders in Bitcoin this year, who invested through traditional channels and that the majority of Bitcoin sold was from new owners ; defined as one month to one year, with a large number of coins held for 30 days or less who sold at the first drop. Bitcoins volatility is new to many institutional and traditional traders, so we can expect this type of selling pressure to wax and wane. I see it as a buying opportunity for a percentage of my disposable income.
Thanks for the information, good info is like gold.
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