Over the past month, coronavirus continued to have a devastating effect on the economy and markets, while stocks, gold, Bitcoin and other cryptocurrencies saw record-breaking crashes.
However, today, multiple stock indices were limited, and the safe haven asset gold rolled back the previous highs. Is Bitcoin the next asset to experience a huge pump?
Stock Exchange Futures Restricted After Opening, Gold Retrieves Highest Previous Level
Record-breaking losses caused by a global pandemic, and as a result, panic-induced selloff, assets finally show signs of recovery.
Earlier today, when the stock market first opened, major US stock index futures such as S&P 500 and Dow maximum limits. The strong fluctuation is due to the government's broadcasting more information about its economic stimulus packages and the spread of the virus a little more as it begins to spread.
US stocks are limited. Gold has returned to the highs. This rose rapidly.
– Alex Krüger @krugermacro Instagram photos and videos • Imgwonders March 24, 2020
Together with the stock market, gold climbs once again and takes back the summits it traded before its historic collapse.
While stimulating packages are positive to save the economy for more danger, printing money essentially causes huge inflation, which is the most common protection for gold due to the relative scarcity of the asset.
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Bitcoin is often referred to as digital gold because it has digital scarcity and other important properties similar to precious metal. Bitcoin was designed as a deflationist and only 21 million BTC could exist.
As more and more fiat currencies are released, it lowers the value of the asset. Fiat's falling value may also cause Bitcoin prices to rise.
And by limiting inventories, gold is back to previous levels, can Bitcoin rise above $ 10,000 soon?
Canceled by Coronavirus: Will Bitcoin Halve?
It is absolutely possible, and while the asset is expected to halve in less than two months and the supply will decline, the value of the cryptocurrency may skyrocket.
Of course, there is no damage yet to the economy that a black swan event like the coronavirus will eventually do to the economy, and since Bitcoin is a high-risk, speculative asset, its value can go very well to zero during such chaos.
Bitcoin has also nearly doubled since the last lows, suggesting that the asset's recovery pump might already have happened.
Related Resources | Crypto Analyst: Digital Gold Narrative Out of Window Between Crisis
However, although these recent increases show signs of improvement, there may be downward trends indicating that previous support was confirmed as resistance before the next leg. The days ahead tell us how to understand whether the market is ready to fully recover, or whether this situation is only calm before the real storm.
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