03
Arp 2020
-
At Middle of march 2020 we were victims of a huge bitcoin fall and in a few
hours it lost around 50% of its value.
This has shown that even though Bitcoin is a currency that is safe to all world instabilities we sow what isn’t the case and that people who own bitcoins are part of the system. Today owners aren't nerds and IT enthusiasts but people to whom Bitcoin is just one of the assets they govern over. This correlates to the World Health Organization (WHO) announcement of "COVID-19pandemic." and a "30-day travel ban between the United States and Europe" that happened after Italy's was put on lockdown.
We know that the economy today is global and sa S&P 500 and DOW Jones dropping nearly 10% it was just logical that people will panic and get out the money from risky investments, in this case it was Bitcoin. So it was a logical move for all big investors to sell their high risk holdings and to buy USD as the US as a country ever defaulted on its payment and by doing that secure their funds.
Problem of bitcoin is low liquidity as very small numbers of bitcoins are being traded with and in this case when banks, VC firms, hedge funds.. Wanted to secure their money and sell fast prices skyrocketed down.
As strange as it sounds but panic that happened all wishes from many big players to secure their funds from the highly volatile market of bitcoin were the driving reason for the huge fall. As bitcoin value is based on the belief of all participants in it, consequences that followed were obvious.
As bitcoin today is becoming mainstream and mature it will suffer from all consequences as all other assets and as it’s so abstract and many economists and investors are struggling to grasp the concept of virtual assets having inherent values, high volatility is here to stay for the foreseeable future.
Stay tuned!
Aleksandar JELIC