The crypto king, Bitcoin is likely to hit this year’s ATH (All-time-high) and crypto enthusiasts are betting big on its upcoming price movement. In fact, they are calling Bitcoin a “remarkable hedge” and a “valid macro hedge”.
Is Bitcoin a Remarkable Hedge?
Bitcoin crossed the $12000 mark on Tuesday with 4.27 percent change over the past 24 hours in a bullish market continuing from July 30. At the same time, traditional stocks plunged. Tim Draper, venture capitalist and the founder of the Draper University pointed in his tweet that Nasdaq is down by 3.4%, Dow down by 2.9 % whereas Bitcoin is up by 3.2 percent.
According to market traders, investors and analysts, Bitcoin is climbing higher in the world’s financial landscape. Analysts including Tim Draper and Thomas Lee (Co-founder of Fundstrat) are even considering Bitcoin as a hedge. While the former had called Bitcoin a remarkable hedge, the latter views it a valid macro hedge. On Tuesday, Thomas Lee tweeted –
Bitcoin is proving itself to be a valid macro hedge. That is a change in its character this year and sets it up for new highs.
Analysts viewing bitcoin as a hedge comes in the wake of rising concerns over China-US trade wars. With the global equity markets dipping down, the crypto market has received enormous interest globally.
Echoing similar sentiments, Jacob Canfield, a popular crypto trader explains that “very strict capital restrictions in China results to move money via Bitcoin”. He says that there is a “Big Macro Event Here”.
Is #Bitcoin breaking out on money flowing out of China?
We are currently seeing a massive rally for the US Dollar verse the Chinese Yuan.
Due to **VERY STRICT** capital restrictions in China, one of the biggest ways to move your money is through Bitcoin.
Big Macro Event Here pic.twitter.com/p1ThvZg2MP
— Jacob Canfield (@JacobCanfield) August 5, 2019
Weak dollar has been good for Bitcoin – Tom Lee
On the other hand, Tom Lee shares the view that it is not just the Chinese yuan that’s responsible for Bitcoin’s price rise .
Speaking to CNBC, Lee explains the weak dollar has been a good sign for Bitcoin.
“The last couple of years, it’s been really correlated to dollar.” Lee states. “Weak dollar has been good for bitcoins. And it’s been really correlated to risk markets. This year, it’s steered away from the dollar because the dollar’s been strong, bitcoin’s been up, which is a real breakage. It’s gone negative on correlation to the equity markets.”
Given the condition of the traditional equity markets, more investors are likely to move towards Bitcoin. The trading value of Bitcoin is at $12170.94 against US Dollar with over 4 percent price growth within the past 24 hours.
So readers, do you think Bitcoin is a remarkable hedge? What’s your take on the growth of Bitcoin in the current politico-economic scenario? Let us know in the comments below
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Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com