By Franklinlee | All-things-Crypto | 16 Mar 2020


When a whole host of noobs are coming into Cryptocurrency and Bitcoin, they come with the view and feeling that Bitcoin is as store of value. The belief is that the price can only go up and that it is not in sync with other financial digital assets. Some see the biggest the use of Bitcoin as a store of value. The crypto community champions virtual currencies as the future of money with Bitcoin portrayed as the Digital gold. Many in the space have even argued at Bitcoin and other crypto assets in general are ideal safe-haven assets and can be used as safe houses to store value in times of high instability in the various markets.



Well I can see it from their point of view sometimes, because they argue that the crypto market has always been resilient in the face of market turmoil affecting FIAT, stocks, bonds and other financial assets. Digital assets like Bitcoin, Ethereum and others have retained their value through crashes, economic downturns, natural disasters and so many other external factors that have wreaked havoc to their conventional financial market counterparts. This view for a long time has stood as cryptocurrencies continued to regularly defy the behaviour of other financial 'assets' response to the economic conditions. As this continued to repeat itself and Bitcoin and other Cryptocurrencies seemed undisturbed and not linked to financial markets, this view continued to gain massive momentum. It seemed like Bitcoin was a safe haven and could contain risks.


Last week however, the Crypto and world market was hit with the full force if the Corona Virus epidemic, and to say the least, Bitcoin and other Cryptocurrencies failed woefully. The top three cryptocurrencies Bitcoin, Ethereum, and XRP lost approximately 19%, 25% and 18% of their value in a few minutes. In two days, it was even a worse outcome, Bitcoin lost 50% of its value (just great for a store of value), I mean we saw it go as low as $3.9k. While the prices looked like they were rebounding, there is still signs in the horizon that it can and will get worse. It looks like the safe haven tag that Bitcoin and other Cryptocurrencies have been endeared with is going to be removed after this run. While a substantial section of the crypto community believe that cryptocurrencies are the ideal financial instruments for retaining one’s wealth in the long term, many sure have come to question that belief in the past one week. The activities of the Crypto market in this last week has all but debunked this belief showing that cryptocurrencies may not be the previously thought safe-havens after all. But there is good news though, the crypto market showed that it could hold its own for days, containing the external pressure from failing world economies and epidemics as much as possible. This is unlike the global financial markets that began to capitulate and crumble after the first signs of pressure. Bitcoin and Cryptocurrency in my opinion will always be better than other forms of assets.



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