The 2020 Coronavirus pandemic has brought massive chaos in global equity markets, with almost all asset classes facing sharp selloffs during the past couple of weeks. Bitcoin (BTC), which is the world’s biggest cryptocurrency in terms of market capitalization, has not been immune to this selloff trend, seeing its price decline quite significantly in the past few weeks. In short, the value of the currency dropped by 50% in the past few weeks, even though the currency started 2020 off with a very strong position.
Generally speaking, Bitcoin is an asset that performs rather well when the stock market is in chaotic turmoil, but what has been a surprise so many is how hard hit the cryptocurrency has been hit during the current meltdown. The reason for this is that Bitcoin is often seen as a hedge against market turmoil, much in the way that many investors flee to gold. Some analysts suggest that many traders and investors are anticipating the possibility of strong financial stimulus from governments, leaving them a little less than sold on investing in Bitcoin, despite the current environment of high panic.
On the other hand, massive amounts of government-backed stimulus may indeed lead to a devaluation of the dollar, which could lead investors to see Bitcoin as a more valuable asset in terms of the concept of “store of value” as an asset. As such, conditions very well may be set for a strong rally for the cryptocurrency in the near future.
However, there are those who believe that Bitcoin will fall to $4,000 or lower in the coming weeks – possibly April 2020.