Cryptocurrency markets are known to be highly volatile and with the COVID-19 outbreak, crypto has not escaped the the meltdown.
Coronavirus has hit many European nations hard with America seeming to be a few weeks behind in terms of infections. A slow moving wave. Traders dealing with Bitcoin believe that such conditions will further bring more corrections and will take the price down. At time of post Bitcoin was trading at $6720, a sizable drop from 10,000 in February.
Mike Novogratz, a billionaire, and an ex-hedge fund manager believes that amidst the commotion Bitcoin will emerge as winner in 2020. He took to Twitter where he confidently implied that 2020 will be Bitcoin’s year.
Over the past few years, Bitcoin has been on a roller-coaster ride with a 50% drop registered within a few hours to $3k level. Relief packages have been announced by the relevant governments but a general sentiment in the market is that such packages will only cushion the hard fall. Novogratz believes that these conditions will continue in the coming few months, but volatility or no volatility, bitcoin will emerge as the winner.
Economies from around the world are printing currencies that would safeguard their economies against the virus impacts. But with too much liquidity, inflation is bound to increase bringing in a devaluation of the fiat currency. With all this running in the background, bitcoin’s inflation rate is likely to drop at 1.8% pretty much lower than the target set by the central bank.
Novogratz believes that the macro backdrop is the very reason behind the creation of Bitcoin and this is why he has hopes for Bitcoin’s revival this year.
Image Source – WSJ