Earlier today, Plan B, an investor and prominent cryptocurrency analyst with wide exposure across media channels, expressed his view on the similarity between market behavior of Bitcoin and the S&P 500 index, a benchmark index of 500 strongest players from America’s industry, which could yield positive results for BTC in the future. He expressed his stand on this in a tweet:
Earlier, it was already noted by other experts in the industry that the stock market and Bitcoin share a lot of commonalities, especially in the critical situation of a recent pandemic crisis. This is why Bitcoin proved itself as a poor alternative for portfolio diversification, which is positively correlated with equities and therefore, would not bring the desirable degree of a hedge.
Instead, it makes more economic sense to accumulate BTC in the aftermath of some striking event, the like of which was the Bitcoin halving event. As a rule, in consequence of such (or similar) weighty occasion the price then goes sharply down, but in a short time period can revive to the level it started from.
S&P500 has been showing a lot of uncertainty lately. Jumping back and forward, the index showed major fluctuations in price which made it more alike to the rival crypto market. A lot of discussions are going on which of the two alternatives can bring more returns in the time of crisis, but there’s no single opinion on that.
If the S&P500 aims for higher spots and shows positive estimates of future growth, the same can be applied in reference to Bitcoin, PlanB ascertains. Overall, this supports a bullish mood expressed by other investors during Covid-19, as well as before and after that.
Quite possible, BTC will still surprise investors with unexpected price gains, not least because of the loudest recent occasion, 11 of May’s Bitcoin halving. Since the aftermath of it has not been clearly demonstrated yet, there is nothing holding the price back from soaring to the previous post-halving levels seen in December 2017, when Bitcoin went shortly beyond $20,000 in price. This unprecedented spike has not occurred ever since, but all bets are saying Bitcoin price will hit a new all-time high sooner than expected.
Being mindful of severe pandemic consequences, the Fed already developed a bail plan of quantitative easing, which is intended to help bring life back into the economy. As such economic measures are taken, they can result positively in the price of digital currency gaining too, since people will have more spare pennies to invest when the economic environment is stable and brings the safety of mind.
This is one of the things that can send Bitcoin prices up. As PlanB believes, Bitcoin currently trades at a price level lower than its real worth, this is why it is possible that in the process of time, Bitcoin will rebound to the ‘true’ value of $18K.
