Bitcoin breached another milestone this year at its rose above $12750 early on 26th June 2019. Bitcoin has recorded 200% rise since the beginning of April 2019 near $4000. While Facebook’s cryptocurrency announcement on 18th June seems to have acted as a strong positive catalyst to its price, other global economic issues form a larger backdrop.
A Larger Backdrop Than Facebook’s Libra?
While Facebook seems to have reinstated the confidence around decentralized cryptocurrencies, specifically Bitcoin as more than 2.3 billion Facebook users will be introduced to cryptocurrencies. However, the currency has received a lot of criticism from Governments around the world, including the US, France, and the UK. Hence, the launch of the crypto coin is still uncertain.
Bitcoin has grown tremendously as an uncorrelated asset in the wake of a global financial crisis with US-China trade war, the tension in Italy and uncertainty around Brexit, the political turmoil in the Middle Eastern Countries and hyperinflation in Latin America.
According to Danny Master, the Chairman of one of the largest cryptocurrency custody platforms, London based, Coinshares Group, noted this is worse than the financial crisis of 2008. He tweeted,
“Today we’re in uncharted territory with central banks & negative interest rates – arguably more so than post ’08 financial crisis. This means policymakers are leaving fewer tools to fight the next downturn that inevitably will occur. Investor psychology is notoriously fickle.”
Therefore, according to him, there is a “larger backdrop” at play there, which is, however, an ominous signal for global markets. Nevertheless, the market capitalization of Bitcoin and the trading volume on it is still far lower than that of traditional markets.
We’re still in the very early stages of the growing asset. Moreover, the institutional money coming in at the moment; however, significant is very low compared to the traditional assets. He tweeted,
Napkin math for CME
$BTC futures volume compared to others supports this read… – 1/5th of crude volume – 1/16th of @Bitmex volume – 1/100th of gold volume In my view, we’ve got a long way to go before we can reasonably conclude that institutional money is here for good.
Do you think that Bitcoin will surpass the utility of Gold? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com