Bitcoin has established itself as a safe haven asset, while other alternative cryptocurrencies are still venture bets lacking strong use cases, according to Galaxy Digital CEO Mike Novogratz.
The billionaire investor thinks ether would be a great bet if it gains trust as a platform to build on.
Digital gold?
Financial markets turned risk averse in the first week of January, courtesy of US-Iran tensions. The resulting flight to safety put a strong bid under classic haven assets like gold, U.S. treasuries and Japanese yen.
Bitcoin also rallied 11 percent during the same time frame, forcing the crypto market community to take note of its strengthening haven appeal.
“We're seeing more and more people participate in bitcoin. I think it’s more of safe haven, similar to a gold trade," Terry Duffy, the chairman, and CEO of derivatives marketplace CME Group said in an interview for CNBC's 'Closing Bell’ on Feb. 3.
Further, more investors are willing to hold BTC over long periods of time - a sign of bitcoin's strengthening appeal as a store of value, according Nicholas Pelecanos, advisor to NEM Ventures.
That said, a few observers think bitcoin is too volatile to be a safe haven or a store of value.
"Bitcoin is currently too volatile to be a store of wealth. There’s two purposes of money, a medium of exchange and a store hold of wealth, and bitcoin is not effective in either of those cases now," Billionaire investor Ray Dalio, the founder of investment firm Bridgewater Associates, one of the world’s largest hedge funds,
said while talking to CNBC at the World Economic Forum in Davos, Switzerland.
All in all, it may be too early to call bitcoin a safe haven. The cryptocurrency needs to consistently put on a good show during times of stress in the global economy and markets to build a strong haven appeal. |
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Rally Gathers Steam
BTC: Price: $9,830 | Market cap: $177 billion | 24-Hr Volume: $40 billion
Trend: Bullish
Bitcoin's price rally has gathered pace in the last 24 hours.
The top cryptocurrency found bids near $9,100 during Wednesday's Asian trading hours and rose past $8,600, invalidating Monday's bearish doji candle and opening the doors to $10,000.
The latest price breakout is backed by bullish readings on the weekly chart indicators. The cryptocurrency has rallied by over 35 percent this year. Even so, indicators like RSI aren't reporting overbought conditions.
Put simply, there is room for further gains. A UTC close above $10,000 would expose the high of $10,300 reached in October 2019.
Corrective pullbacks, if any, could run out of steam around the ascending (bullish) 5-and 10-day averages located near $9,410. Read Analysis |
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In this feature of the Markets Daily newsletter, we aggregate news, reports, ideas and tweets relevant to crypto traders and investors.
Germany’s BaFin Clarifies Licensing Process for Foreign Crypto Custodians (CoinDesk)
In its latest guidance released in January, the regulator said firms already custodying digital assets for Germans would not be penalized for not having a license.
The Case Against Crypto Maximalism (Hackernoon)
Bitcoin could evolve into a widely trusted form of global, Internet-native money. The experiment of decentralized digital money has already surpassed many expectations.
Goldman Loses Rana Yared, Partner Who Was Face of Crypto Efforts
(Bloomberg) Rana Yared, a rising star who once helped lead the foray into crypto-trading operations at Goldman Sachs Group Inc., is leaving in the firm’s latest loss of senior tech talent.
Hong Kong-based Bitcoin startup shuts down amid coronavirus, protests (Decrypt)
Bitspark, a Hong Kong-based cryptocurrency remittances company that served the Asia-Pacific markets, announced on Monday that it will shut down on March 4, 2020.
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| | | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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