Safe-haven assets are more popular amid concerns about a Corona virus outbreak. Bitcoin, meanwhile, collapsed at the weekend, prompting investors to question its ability to act as a hedge against risk.
Global rushing into safe-haven properties
Gold prices skyrocketed above $ 1,700 per ounce as investors rushed to invest in it. Precious metals hit the highest price in more than 7 years, showing immunity to the fear-free Corona virus in all major global economies.
Michael McCarthy, chief market strategist at CMC Markets explain:
“Present, Clearly people are rushing into safe haven assets, and gold is the main beneficiary. The market is concerned we can see a bad situation before things get better, of course that's good news for gold. "
Gold / USD | Source: TradingView
Anarchy in global financial markets caused Goldman Sachs Group Inc. Gold is forecast to increase by $ 200 in 12 months. Bank positive In the event that the effect of Corona virus spreads to the second quarter of the year, gold could increase to $ 1,800 per ounce in 3 months.
BTC did not meet expectations
Spot gold price has risen by 8.2% since the beginning of the month, recently reaching a high of 1,703 an ounce. Meanwhile, BTC is considered by many to be a safe haven in the name of “digital gold” which has dropped 12%.
The leading cryptocurrency traded below $ 8,000 for the first time since January and plunged to a low of $ 7,730 by the end of the week.
BTC / USD | Source: TradingView
Peter Schiff, CEO of Euro Pacific Capital, said that the fact that BTC could not rise in the context of the most ideal financial situations is a clear sign that a strong decline is happening.
There is nothing surprising about this crash to anyone following me on Twitter. I repeatedly warned last week that Bitcoin's failure to rally on the most ideal financial circumstances meant a crash was coming! https://t.co/jGJX8pTQHz
– Peter Schiff (@PeterSchiff) March 8, 2020
"No surprises about the case fall This to anyone who follows me on Twitter. I repeatedly warned last week that BTC was not increase in the context The most ideal financial situation means price almost meet disaster! "
At the same time, the Nobel Prize-winning economist Nouriel Roubini argued that BTC's poor performance in the context of this global epidemic erased the notion that it could serve as a hedge against the period. financial instability.
In the meanwhile Bitcoin is down 8% in the last day, much more than global equities. Another proof that Bitcoin is NOT a good hedge vs risky assets in risk-off episodes. It actually falls more than risky assets during risk-off. So BTC is a shitty shitcoin hedge in risk-off cases
– Nouriel Roubini (@Nouriel) March 9, 2020
"Meanwhile, BTC fell 8% in the last day, more than global stocks. This is Other evidence shows that BTC is not a good hedge against risky assets. It's really reduction More risky assets in time little risk. Therefore, BTC is a shitcoin barrier in cases little risk”.
With 8 new countries including Bulgaria, Costa Rica, Faeroe Islands, French Guiana, Maldives, Malta, Martinique and Republic of Moldova report Regarding the first case of Corona virus, investors are “extremely worried” about the downturn of the cryptocurrency market.
While fear can be seen as a positive sign according to the Crypto Fear and Greed Index (greed and fear index), technical analyst Michaël van de Poppe still thinks that Bitcoin could drop to $ 7,350. .
And not even $ 8,200 is providing support.
Now looks like uploaded overdue for a bounce, but not expecting it to break $ 8,500.
As discussed yesterday, main areas around $ 7,350-7,500 after $ 8,200. pic.twitter.com/4rwFygWvZZ
– Crypto Michaël (@CryptoMichNL) March 9, 2020
"And even $ 8,200 doesn't provide support.
Now it seems overdue for a rally, but don't expect it to break $ 8,500. As discussed yesterday, the major regions are around $ 7,350-7,500 after falling below $ 8,200. "
Bitcoin mining industry is threatened when the price falls below 8,000 dollars
According to F2 Pool analysts, the $ 8,000 price of BTC could be very important for mining equipment operators. For example, Antminer T9 + and Ebit 9.3 have exited the game.
F2 Pool's calculation is based on the assumed electricity cost of US $ 0.05 / kWh. Therefore, all ASIC models with hashrate between 10 and 20 Th / s can start to cause losses for miners.
The most common ASIC at stake is Bitmain's legendary Antmainer S9 used by hundreds of thousands of miners. At 13Th / s, it becomes unprofitable if the BTC price breaks below $ 7,845 which seems impossible.
Hard times for Proof-of-Work
Things got even worse after the next BTC network adjustment today with the current estimate of a 7% increase. This story may draw attention to the recently published Bitmain Antminer S19 and S19 Pro with hashrates of 95 TH / s and 110 TH / s, respectively.
Unfortunately, this is not the first time in 2020 miner's profits are in danger. Antminer E3 is stopping mining of ETC with only 3 weeks left to mine ETH. This is due to an increase in the volume of Directed Acyclic Graph files that cannot be addressed with the Antminer E3 DDR capacity.
You can see the price of BTC here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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