Bitcoin has been making progress since the rate cut by the U.S Federal Reserve. Since then, Bitcoin has risen from $9,000 to over $12,000 and still pushing despite the crashing stock market. Bitcoin’s progress is not about to stop, as Bitcoin bull and head of research at Fundstrat, Tom Lee says the stock market may continue to crash but Bitcoin is clearly heading up.
Speaking on CNBC Fast Money, Lee said Bitcoin initially had a positive correlation to the U.S Dollar but it currently shows a negative correlation thus a crashing U.S Dollar is likely to push the price up. He added that Bitcoin this year, unlike the years before, is correlated to gold and that makes it a viable source of diversification.
A Stronger Competition
Bitcoin gradually starting to put up strong competition against gold, one of the reasons being that it is positively correlated to gold. The number one cryptocurrency is considered to be a good store of value as it continues to increase in value even at a faster rate than gold which has been the traditional store of value for decades.
The U.S-China trade war which is contributing to the current “mayhem” in the stock market has not affected Bitcoin at all. As a matter of fact, it is serving as a major push to the upside and so may become an attractive investment option as Lee said. The current devaluation of the Chinese Yuan may also be a factor that will push investors.
More To Come For Bitcoin
Bitcoin bulls like Tom Lee believe it is going a lot higher than it is today. Although 2019 has proven to be a crypto-friendly year, 2020 has been marked by bulls as a bigger one. The Bitcoin halving which is coming in less than a year and the fact that institutional investors are expected to rush into Bitcoin are just two of the factors predicted to send Bitcoin soaring.
Bitcoin did start the new week on a good footing with a remarkable price surge, but the end is not clear yet. At the time of writing this article, the top cryptocurrency is experiencing a dip whose extent isn’t known as analysts say a pullback is possible. The pullback according to them will, however, be a buying opportunity and a healthy correction for the move.