Bitcoin, over the years, has prided itself on so many attributes, of which some have already been displayed along its journey in the world’s financial scenes. Bitcoin, over the years, has also been described by many experts and bitcoin fanatics as a ‘safe haven’ asset which serves as a hedge against inflation as well as withstands and adapts in the face of adversity.
While bitcoin, over the years has shown some of its qualities to the financial world, many experts and analysts believed that the current geopolitical tension would be a catalyst that would send its price soaring even much higher. After its impressive 14% rally on February 28, bitcoin has struggled to keep its upward momentum and has endured a horrid few days after bulls failed to break its price above the $45,000 mark before March 4’s options expiry.
Bitcoin’s performance, however, is contrary to what many analysts had predicted in wake of Russia’s military attack on Ukraine. Crude oil rose to its highest price since 2008 because of the current geopolitical tension as many economists believed that the current development may drive up inflation, which already is at its highest in four decades. The threat of a global war breaking out has also sent the financial scene into a frenzy with many investors looking to shield their investments and that’s where some market experts expected bitcoin and the crypto market in general to gain.
The Ukrainian government has already resorted to digital currencies with bitcoin being the front runner, for the transactions and also the purchase of military items including bulletproof vests and night goggles as reported. Over millions of donations have also been made in crypto to Ukraine, a development which again, was expected to boost the current crypto scene.
Bitcoin, which is expected to trade independently from the mainstream financial market seems to be caught up in the same web as stocks, as both are coincidentally falling. Bitcoin’s correlation with the EPU index earlier this month was negative, according to an analyst.
A negative correlation suggests that when uncertainty grows, bitcoin should decline, and vice versa which the naysayers have been quick to point out as the exact opposite of what you want from a hedge.
Bitcoin at press time was trading at $41,932, up 0.56% in the last 24 hours. Bitcoin over the years has showcased its resilient nature and has broken many barriers en-route to its famous journey. Although the price of the biggest crypto asset on the market looks to be shaking, it does have a proven record of overcoming hard times and shouldn’t be written off as such.