Bitcoin, Ethereum, and the crypto space in general have not been doing well for nearly a year. The world’s number one digital currency by market cap has fallen from its November 2021 all-time high of about $68,000 per unit to roughly $19,000 at the time of writing. That’s a loss exceeding 70 percent, and it makes the bearish conditions of 2018 look tame by comparison. The crypto market has also lost more than $2 trillion in valuation.
Bitcoin Has Remained Somewhat Strong
Many industry heads believe the upcoming midterm elections are likely to have huge effects on the prices of assets like bitcoin, though according to Chris Kline – the co-founder and CRO of Bitcoin IRA – the resiliency of the present market is being ignored somewhat. He commented in a recent interview that bitcoin has managed to maintain a certain level of strength throughout this present bear run, and he’s surprised nobody is talking about it.
He mentioned:
There’s not as many newcomers to the market space as there were, say, a year ago. It’s slowed down on that front, but the existing clientele, the longer-term investors, they’re here and they’re resilient.
Mauricio Di Bartolomeo – co-founder and CSO of Ledn, a global digital savings and credit company – also threw his two cents into the mix, stating:
Bitcoin is actually outperforming gold, the S&P 500, the great British pound, the euro, the Canadian dollar, and a slew of other foreign currencies and asset classes. The world wants dollars, but those who have them don’t want to sell them. Bitcoin is a bit of a conduit to get U.S. dollars because it has great U.S. dollar liquidity.
He further stated that one of the big issues is that bitcoin and the crypto market cannot undo their ties to stocks. He says all these arenas and others have been in correlation with each other this year like they never have before, and thus when stocks fall, crypto is likely to do the same. He said:
If you look at the correlation with bitcoin and the S&P 500, or the NASDAQ, and you look at them on a 30-day framework, or even on a one-year framework, [the correlation is] still relatively strong.
Losing the Inflation Fight
One of the big problems this year – according to Dr. Martin Hiesboeck, head of blockchain and crypto research at Uphold – is that bitcoin’s reputation as a hedge against inflation was challenged, and it ultimately failed to pass the test. He mentioned:
Neither gold, nor digital assets and not bitcoin proved a hedge [against inflation] because the problem is the dollar strength. We all thought that bitcoin was going to be an inflation hedge, but it turns out in times of war, the ‘safe haven’ is still the U.S. dollar, which projects military might more than decentralized computer networks like bitcoin.
Source: https://www.livebitcoinnews.com/analysts-despite-bear-market-bitcoin-has-remained-tough/