As Bitcoin regains its footing just over $7000 per coin, analysts are looking at gains in the dollar itself, and how these correlate to current BTC value.
Noting that Bitcoin is basically back to where it was at the beginning of this year dollar-wise, Coindesk writers Bradley Keoun and Sebastian Sinclair point out that this means the digital asset is beating most other world currencies.
“If Bitcoin were a government-issued currency, it would be one of the world’s top performers – beating not only popular emerging-market tenders like the Mexican peso and South Africa’s rand, but also advanced-nation stalwarts like the euro, British pound and Canadian dollar,” Keoun and Sinclair write.
This analysis underscores longer-term dollar moves: it wasn’t too long ago, for example, that the dollar was equal to about one half of a British pound. By contrast, the dollar is now nearing the full value of a pound, and pretty commensurate with the full value of the euro. Since Bitcoin values are dollar-denominated in general, that means any gains by the dollar against foreign currencies are similar gains for Bitcoin, to the extent that Bitcoin price tracks with the dollar.
“Bitcoin continued beating out any competition on March 7, turning $9,000 into solid support while coronavirus ravaged stocks and forex alike,” wrote William Suberg at Cointelegraph earlier this month. “Having beaten expectations, Bitcoin appeared an increasingly safe bet as the week drew to close. Traditional markets, fresh from serious losses, remained volatile on Friday.”
You can see more details in the above coverage, but the gist of this is that both Bitcoin and the dollar are seen as safe haven stores for cash amidst a cratering in equities and commodities markets that’s running deep partially due to coronavirus, and will run much deeper in the months to come. Even before the virus closed businesses around the world, capricious US/China trade disputes had already bogged down global stock markets with uncertainty and loss, with American farmers, for example, taking a big hit.
Those looking at a range of options for investors fleeing equities would say that Bitcoin has to contend with gold and other precious metals. However, Bitcoin holders argue that institutional and business adoption of these digital assets will drive value in the years to come. Do the research for yourself, figure out what you think and put that to work in your portfolio.
The choice is yours.
