Bitcoin price plunged below $9000 mark yet again. What looked like a possible break above $10,000, has turned into longer days of consolidation.
The narrative for Bitcoin [BTC] investment has taken many shapes and forms over the years. After its failure as a payment mechanism in 2016-2017, the ‘safe haven‘ narrative has become wildly popular.
Kolanovic, JP Morgans’ global head of macro quantitative and derivatives strategy, suggests strong bullish growth of the equity markets.
Gold/USD Daily Price Chart (TradingView)
Gold prices slumped below $1500, at the beginning of the week. As the stock market continues to rally, and the trade tension relaxes and easing of the global monetary policies. Hence, the short term need for a safe haven, which was a strong catalyst in the upward price movement, seems to have slowed down.
Can Halving Keep the Momentum Going?
Bitcoin [BTC] halving is due next year in May. The event will reduce the rewards for mining Bitcoin by half. This represents a massive shift in the supply of the cryptocurrency. It acts as a reliable bullish indicator as the ecosystem looks to keep the price above the break-even price for miners.
Nevertheless, the overall demand for Bitcoin has been questionable with a lack of retail interest. An analyst, KernelTrader noted on Twitter,
$btc has shown one thing, with current supply, the demand just isn’t there to maintain 5 digit prices over a sustained period
Is a small reduction in daily issuance going to suddenly change that?
Based on current demand, I’m not convinced it will
But Bitcoin is More than That
Bitcoin [BTC] competes with gold as a store of value.