2020 has been a turbulent year for Bitcoin and the aggregated cryptocurrency market, with bulls having firm control over the benchmark digital asset throughout all of January and most of February, before losing their strength to sellers in March.
This heightened volatility has occurred against a backdrop of bearishness within the global economy, which – like Bitcoin – peaked in February before the lethal COVID-19 virus began rapidly spreading, leading many economies to reach a virtual standstill.
The pressure created by this pandemic has proven to be devastating for nearly all major global markets, with some benchmark stock indices seeing single-month losses in March of nearly the same size as those incurred during previous depressions.
The crypto market – despite previous narratives regarding them being independent from the global economy – plunged alongside everything else, with Bitcoin seeing an unprecedented decline from highs of $10,500 to lows of $3,800 in a matter of mere days.
Now, a new report from a Seattle-based crypto hedge fund explains that hope-inducing narratives currently surrounding Bitcoin may be largely underpinned by false assumptions, potentially causing significant damage to the markets once these narratives are invalidated.
Report suggests “halving” and “stock-to-flow” models may be false narratives
In a recently released report from the Seattle-based hedge fund Strix Leviathan, the group takes a critical approach to analyzing the merits of the bullish narratives currently circulating throughout the cryptocurrency community.
In the near-term, Bitcoin’s upcoming mining rewards “halving” event is widely anticipated to give the crypto reason to run, with many analysts pointing to the roughly 50 percent inflation reduction and subsequent miner capitulation as reasons why it may catalyze upwards momentum.