Bitcoin’s steady performance amidst economic uncertainty and a weakening dollar hints at a bullish outlook, as investors shift towards alternative assets like bitcoin.
Bitcoin’s performance since the announcement of President Trump‘s tariff plans on April 2 has been a stark contrast to the traditional markets. While stocks have plummeted, bitcoin has remained relatively steady, losing only 8% of its value.
Bitcoin is a decentralized digital currency created in 2009 by Satoshi Nakamoto.
It uses cryptography to secure and verify transactions, allowing for peer-to-peer payments without the need for intermediaries.
The total supply of bitcoin is capped at 21 million, making it a scarce asset.
Bitcoin's value is determined by market forces, with prices fluctuating based on demand and supply.
Historically, when investors seek alternative assets due to stagflation, scarce commodities like gold and copper tend to perform well. Bitcoin is seen as a potential beneficiary in such scenarios. According to Zach Pandl, head of research at Grayscale, the relatively moderate drawdown in bitcoin reflects its potential for long-term adoption.
The performance of bitcoin against the Roundhill ‘Magnificent 7 ETF’ demonstrates a rotation away from large-cap tech stocks towards commodity assets like bitcoin. This shift in investor sentiment is a positive sign for bitcoin‘s price, as it indicates a change in market dynamics.
Those who subscribe to bitcoin as a safe haven in uncertain times have seen their conviction in the asset increase over the past week. If investors believe that the erosion of the dollar’s position is part of the bitcoin thesis, then their conviction should be strengthened by the current market conditions.
Zach Pandl expects bitcoin‘s price to rise in the medium-term, reaching new all-time highs this year. Despite the current downturn, his conviction in bitcoin‘s long-term potential remains unchanged.
