The shaky global economic situation owing to the US-China trade wars and recession fears seem to have catapulted Bitcoin to a position of nearly 70% market dominance. The cryptocurrency has shown marked growth over the last 30 days. According to the data available on CoinMarketCap, Bitcoin’s dominance on July 9 was nearly 64.7%, and its price stood at $12,667. Today, Bitcoin shows a market dominance of 69.4% despite a decline in the price.
Max Keiser’s prediction coming true?
On August 6, Bitcoin maximalist and former Wall Street trader Max Keiser had tweeted that Bitcoin’s dominance was heading to 80%, and that the 2014-2017 era of altcoins and hard forks was dead.
At press time, Bitcoin’s market dominance stands at 69.4% with a market cap of $211,343,748,987 out of the total market cap of $305,805,167,819. Leading altcoins – Ethereum, XRP, Bitcoin Cash and Litecoin have market cap of $23,217,398,613, $12,991,065,920, $5,911,224,218 and $5,581,637,936 respectively.
It is to be noted that Ethereum has a strong community in the cryptocurrency space and several cryptocurrency supporters have predicted that Ethereum will overtake Bitcoin in the future. Mike Novogratz, a well-known Bitcoin proponent, announced at the Ethereal Summit in May 2019 that Ethereum is “way ahead” of Bitcoin and is likely to replace Bitcoin as the most valuable network in the future. However, Ethereum, the second-biggest cryptocurrency after Bitcoin, has a market cap that makes only 8% of the total at the time of writing this article.
Given the way the market is behaving, could Max Keiser’s predictions about Bitcoin come true?
Bitcoin’s Status as a “Safe Haven” in Prevailing Economic Conditions
The prevailing economic situation, where the US and China are at loggerheads and traditional stocks are showing dismal performance, is creating FUD among investors. US Treasury Secretary Larry Summers recently said that the world may well be experiencing the most dangerous financial moment since the 2009 economic crisis.
Nomura strategist Masanari Takada echoed similar sentiments stating the next spike in volatility “could be Lehman-like.”
Given the fear of economic turmoil and recession, it is not surprising to see investors flocking to “safe haven” assets including bitcoin.
According to CNN,
“Trade war and recession fears have caused nervous investors to seek refuge by piling into gold, government bonds and even bitcoin.”
The Chief Marketing Officer of Rhythm Technologies, Chris Reinertsen, also recently declared Bitcoin to be a safe haven asset. According to Reinertsen,
“There is a flight of capital to safe-haven assets across the board, which now includes Bitcoin. Throughout the last few years, we have been seeing the trend of Bitcoin increasingly becoming fundamentally correlated to more macro moves as increased economic uncertainty in the world increases.”
Affirming Bitcoin’s new status, Morgan Creek Digital’s Anthony “Pomp” Pompliano, on CNBC’s Squawk Box said that Bitcoin is a “non-correlated asymmetric asset” and having no exposure to the asset class was irresponsible for financial institutions.
Bitcoin was invented in 2009 in the wake of the economic crisis that witnessed the collapse of several major financial institutions, and the world is at the cusp of a similar economic situation again. Bitcoin, in its 10 years of existence, has shown a high degree of volatility and governments around the world continue to shun it. However, its non-correlated nature with gold, stock markets or fiat currencies is what makes it so attractive to many investors in the current market. Bitcoin’s positive performance in a worsening economic climate may push the asset into the league of mainstream assets along with the likes of gold and government bonds.
Do you think that Bitcoin is a “safe-haven” asset? Share your opinion with us.