What determines the price of Bitcoin at a time of great uncertainty?
2 min read
In just three months, 2020 has brought some unpleasant surprises. The year began with geopolitical tensions between the US and Iran, and the coronavirus pandemic is now raging, which has forced most economies to take stringent measures. With increasing global uncertainty, investors are looking for a place to escape. What determines the price of Bitcoin at a time when we do not know what will happen tomorrow?
2020 is a major crisis for big investors. The coronavirus pandemic sent indices of European and US stock exchanges to the ground. The price of Bitcoin fell as well as the difficulty of mining.
Robert Breedlove, founder and CEO of Parallax Digital, commented on increasing market volatility in the latest Bitcoin Echo Chamber episode. Asked about the role of Bitcoin, gold and the US dollar, he said:
“As far as escape to safety is concerned, fiat offers a wide range of applications. And this is useful in times of crisis. You don’t know what to expect. So you slow down to see better on the road. This slowdown is the accumulation of cash. And whether we like it or not, the US dollar has the largest liquidity of all assets in the world. ”
To BTC and Gold Breedlove said:
“It’s not about the inviolability of gold. Rather, it is the energy it takes to get to it. The same can be said about Bitcoin. The energy needed to get it gives him a price. In other words, commodities are mainly trying to cover their production price. ”
