‘Fireworks Are Coming’ — FX Markets Will Boost Bitcoin, Says Analyst

‘Fireworks Are Coming’ — FX Markets Will Boost Bitcoin, Says Analyst

Coinbase analyst Max Bronstein says “fireworks” in the global currency market might positively affect the value of Bitcoin.

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Max Bronstein, who works on the Institutional Coverage team at Coinbase, believes “fireworks” are coming to the global currency market. What’s more, a spike in volatility of currencies might largely benefit the price of Bitcoin (BTC).

He said:

“A lot has been said on BTC’s performance during bouts of equity volatility, but not as much on how BTC would perform during bouts of FX/currency volatility. With global currency vols off historic lows and a huge wave of new debt, fireworks are coming to the currency market.”

Even before the pandemic hit the international economy, Bronstein noted that the global monetary system was fragile. Many countries are at risk of seeing their currencies decline in value due to various reasons.

The analyst said that currencies are vulnerable due to the low dollar reserves and high dollar-denominated debts of many nations.

Global currency volatility drops to a record low

Global currency volatility drops to a record low. Source: Bloomberg, JPMorgan

Why would it benefit Bitcoin?

Currencies with a history of hyperinflation are at risk of observing a similar trend in the near-term. Bronstein pinpointed the Argentine Peso, the Turkish Lira, and the Brazilian Real as examples of currencies with low dollar reserves.

The Argentine Peso, for instance, recorded an inflation rate of 42.1% in May 2020, according to data from Trading Economics. Bitcoin price could benefit as the fear of hyperinflation, massive currency volatility and devaluation hits, says the analyst.

The inflation rate of the Argentine Peso

The inflation rate of the Argentine Peso. Source: Trading Economics

Bronstein explained:

“In all of these cases, currency vol and weakness will primarily stem from a government’s need to devalue their currency. Bitcoin sits in stark contrast as it can’t be debased by a central party. In a regime where nearly every government has an incentive to debase their currency, few monetary systems stand to benefit as much as Bitcoin does. Never before has an open-source competitor to fiat currency been so needed.”

Not a short-term effect

The historic low volatility of the global currency market does not indicate that a massive movement will occur in the immediate-term. It also does not suggest that it will cause a near-term spike in demand for Bitcoin.

In the long-term, however, concerns around devaluation and hyperinflation could spur a steady demand for Bitcoin. The positive effect on BTC might snowball if the perception of the top cryptocurrency as a store-of-value improves, particularly following the V-shape recovery of Bitcoin since its plunge to sub-$3,600 in March, which has shown its survivability.

Meanwhile, several other countries are struggling with similar issues pertaining to hyperinflation or devaluation of national currencies. Iran and Venezuela, for instance, have seen reports of Bitcoin operating as a means of payment and unconfiscatable digital money as their respective national currencies have experienced hyperinflation in recent years.

In the long-term, as the on-ramp infrastructure supporting Bitcoin and cryptocurrencies improves, there exists a strong possibility that BTC is used as a currency, possibly alongside existing currencies.


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Coinbase analyst Max Bronstein says “fireworks” in the global currency market might positively affect the value of Bitcoin.

Bitcoin Could See FOMO Fireworks For 4th of July: New Report

Bitcoin Could See FOMO Fireworks For 4th of July: New Report

SFOX analysts say the 4th of July holiday could spark FOMO during bull market

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A new report from crypto analytics site SFOX suggests bitcoin (BTC) could see a price hike on American Independence Day — July 4th. 

In a July 3 blog post, SFOX analyzes the apparent impact that holidays can have during a crypto bull market, arguing that they appear to spark fresh FOMO — or fear of missing out:

“Thanksgiving of 2017 marked the beginning of bitcoin’s run-up from the low $8000’s to its peak of almost $20,000 on December 17th […] in February of 2019 during the two week Spring Festival celebrated throughout China […] the price to buy bitcoin climbed 14%, from $3419.17 to $3908.97, peaking at $4027.83 a few days later before deflating back to the $3750 level.”

Holiday-driven price fluctuations appear to be backed by Google Trends data for retail interest in bitcoin, SFOX notes, remarking that during the winter 2017 bull run, United States search volume for ‘bitcoin’ surged in the days immediately following both Christmas and New Year.

Conceding that the data is far from conclusive, the analysis nonetheless ventures that family and social get-togethers foster first-time interest and awareness, and also offer occasions for people to gift the asset to their friends and loved ones. 

Bitcoin price during the holiday season and winter bull run 2017

Bitcoin price during the holiday season and winter bull run 2017. Source: SFOX

Nuancing their observations, the analysts define the trend as follows:

“At times when the market is already doing well or improving, holidays have the potential to drive renewed retail interest in buying bitcoin and other cryptocurrencies. That behavior, almost by definition, is FOMO: buying into an asset because one sees it trending upward and wants to benefit from it.”

Addressing investors and traders, SFOX offers the caveat that price peaks spurred by the “whims” of “mass psychology” — unlike those driven by changing fundamentals — have historically shown themselves to be fleeting.

As reported, experts have widely noted that the current market rally appears to be driven largely by institutional, not retail interest unlike in late 2017.

Nonetheless, by the end of June data from Google Trends’ revealed that internet googling of ‘bitcoin’ had hit at a 17-month high.


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SFOX analysts say the 4th of July holiday could spark FOMO during bull market