The current economic slowdown, coupled with the growing uncertainty about the Kovid-19 outbreak, challenged the integrity of safe haven assets. Bitcoin’s price drop had a lasting effect on investor sentiment and also affected the price of other cryptocurrencies. The coming months, especially after the halving, will be done well to explain the status of the leading cryptocurrency in investors’ minds.
Michael Novogratz, CEO of Galaxy Digital, spoke about the latest developments in the economy and its impact on other value assets such as Bitcoin and gold. He said: “The new adoption narrative in Bitcoin is seen as part of the future of building a decentralized internet. You know, putting it back 12, 18 months. It is possible to say this because we will have to overcome it and then we will have to rebuild trust. ”
Trust Story
According to him, the current price drop and the uncertain feelings of the market reduce trust in investors. Novogratz emphasized that cryptocurrencies, including Bitcoin, are a trust-building story. Novogratz said:
“Bitcoin and all cryptocurrencies are a story of trust, right? This is a door of trust. Valuable things are just because we call them valuable. Gold is currently a game of trust. And we’re in the middle of the toughest global trust situation I’ve ever seen. “
Interestingly, recently, the 1-month correlation between Bitcoin and gold has seen an upward trend, rising from 38 percent to over 55 percent. Much needs to be done to increase investor confidence. According to market data from the curve, the volatility of Bitcoin rose from 63 percent to 188 percent last week. Although this shows that the price can swing in either direction, although not more often, it cannot always be considered a good indicator for a long-term asset.
Novogratz also commented on the inflation period that the economy will witness very soon, and talked about how investors normally view cryptocurrencies and gold as hedging assets. Novogratz also pointed out that Bitcoin does not behave differently compared to other risk assets. Despite these red alarms and recent poor performance, Novogratz said he continues to believe in Bitcoin and is sure that he will be back soon.
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