Unanticipated activities on Bitcoin value over the weekend leaves the coin above $11,000 in value today.
This spike is leading traders and other parties to think carefully about what is happening to Bitcoin in the context of the global economy, where it’s being looked at as an attractive alternative to fiat currencies, especially the dollar.
“Changes in global economic sentiment still have considerable sway over Bitcoin investment,” writes William Suberg at Cointelegraph. “This week, attention will focus on the heat between the United States and China, along with fresh coronavirus stimulus measures from Washington. The situation is precarious — Bitcoin’s rise over the past few weeks has come as the dollar sees a protracted fall. At the same time, investors have rushed into safe havens such as gold and silver.”
There’s the contention that Bitcoin is untethering from equities at just the right time, and that it provides a good hedge against inflation.
At the same time, gold as a precious metal is also experiencing its own upward swing nearing $2000.
Goldman Sachs provides an outlook suggesting that gold will be at $2300 in 12 months.
Part of this involves uncertainty about the US dollar remaining the reserve currency for world markets
Analysts cite the massive coronavirus aid packages that were necessary due to widespread United States closures as co-the cases skyrocket in many states:
“Goldman said the measures taken by the U.S. government to lessen the economic impact caused by the pandemic — for example, stimulus payments — could easily lead to a rise in debt through currency debasement,” writes Turner Wright in other contemporary Cointelegraph coverage. “The bank stated that such conditions would boost prices in gold and silver. However, many other alternatives to fiat currency would look more attractive to investors as the U.S. dollar slowly loses its value as a reserve currency.”
Traders continue to look at the ups and downs of Bitcoin charts to figure out whether items like futures gaps will propel the value further up or further down, and whether Bitcoin is going to keep changing how it tracks with the American market. Do your research before wading in.