Bitcoin Continues Grinding Higher as Stocks, Gold Level Off
With the halving now several days away, bitcoin (BTC) has continued to grind higher in the market in recent days, despite a weaker overall crypto market and a levelling off in the price of both gold and US stocks.
The outperformance of the number one digital asset has been particularly strong after the COVID-19 panic hit the financial markets with full force in March, sending nearly all assets – including bitcoin and gold – sharply lower. Following the crash, however, bitcoin has seen a strong recovery in the market, possibly helped by investors positioning themselves for the upcoming halving in mining rewards that is expected to occur on May 11-12.
The recently strong performance of bitcoin compared to other risk assets also caught the eye of Quantum Economics founder and former eToro senior analyst Mati Greenspan, who noted today that US stocks (represented by the Dow Jones Industrial Average Index) are lagging behind while bitcoin “has been surging,” adding the hashtag “decoupling.”
The decoupling of bitcoin from traditional financial assets is something many in the bitcoin community would like to see, given the generally negative sentiment towards banking and fiat currencies that the community is known for. Meanwhile, a lack of correlation with other financial assets has also been a major selling point for the digital asset, with some traditional investors taking positions in bitcoin based on the idea of it being an “uncorrelated asset.”
And although those who have been hoping for bitcoin to decouple from the broader financial markets may have gotten somewhat disappointed after bitcoin’s “Black Thursday” on March 12, it now appears as if fundamental tailwinds for digital assets may help make the decoupling real, as suggested by Mati Greenspan.
Although it’s still an open question what the immediate effect of the halving will be on the bitcoin price, a number of scenarios have been drawn up, ranging from no effect to an upward price pressure.
As of press time on Thursday (11:21 UTC), bitcoin was up by 1.7% over the past 24 hours and 4.7% over the past 7 days, currently trading at USD 9,294. The price has already more than recovered all of its losses from massive COVID-19 sell-off, which the stock market is still far away from doing after a fall of about 35% from top to bottom.