According to Kathleen Breitman (co-founder of Tezos), Bitcoin’s reputation as a “store of value” is “decimated”.
Breitman made his comments as the crypto market reacted to fears that an economic downturn would be triggered by Japan’s stock crash.
Breitman, during her CNBC ‘Squawk Box” appearance on August 5, called Bitcoin “internet fake money.” Bitcoin is considered to be a highly speculative investment.
She said that whenever “traders get a sense something looks like a depression,” they sell these assets.
Breittmant explains that she doesn’t believe in the narrative of a store of value. She believes that Bitcoin will become a more valuable asset as well as a way to exchange value.
Gold is often compared with Bitcoin. It has remained fairly stable, and it even exceeded the $2500 threshold for the first.
There are many factors at play
Bitcoin briefly dropped under $50,000 when the US unemployment rate rose to over 4,3%, according to data published on August 2. As Japan raised its interest rates unexpectedly, carry trade strategies on U.S. market were directly affected.
Carry trading, also known as carry-trading or “carry-forwarding”, is used by many forex traders and money managers. This involves borrowing money in low interest currencies such as the Japanese yen, and then swapping it for higher-interest currencies. The traders are able to profit by the interest rate difference between two currencies.
Stocks and bonds are purchased with the high-interest currency.
As the Bank of Japan raised its rates of interest, traders that had borrowed yen began closing their positions because of the increased borrowing costs. Nikkei stock index fell close to 14 percent as investors began to sell their holdings to pay off the debts.
Growing political tensions between Iran and Israel in the Middle East also contributed to the decline of Bitcoin. The massive liquidity from Jump Crypto in the last week also did not do much to help Bitcoin.
In 24 hours, the total cryptocurrency market cap fell to $1.81 trillion. This represents a drop of more than 15 percent. The derivatives market took a huge hit with over $1.2billion in liquidations recorded during this time period.
Diverse opinions are heard
Analysts of cryptocurrency have mixed views on the future direction Bitcoin will take from where it is now.
Rekt capital, a crypto analyst, predicts that Bitcoin will experience another downturn. According to him, historical data showed that Bitcoin is nearing the post-halving break-out point. This can be observed between 150 and 160 days after the halving.
Analysts see “spread” of additional “downside deviance” on the short-term.
Moon, a crypto analyst, highlighted $51,000 as an important point that should be watched. He expects that if Bitcoin does not hold this area of support, it will fall towards $45,000.
Bitcoin was at $54,687 when this article was written, but it had fallen 7.8% in the last 24 hours. The psychological level of $50,000 appears to have held strong.
In this context, Satoshi Flipper, a crypto analyst, said that Bitcoin had initiated a “V shape” recovery. This is a pattern which forms when an investment quickly recovers from a major downturn.
Analyst pointed out a pattern of a bull-flag on BTC’s chart, which he said had formed for 7 months. Bull flags form during consolidation periods and are usually followed by an outburst.
The crypto analyst Elija has also noticed a pattern similar to the Bitcoin chart monthly, and speculated that this flagship cryptocurrency will experience a “breakout boost.”
The post Bitcoin’s Store of Value Status Questioned as Analysts Share Mixed Opinions may be updated as new developments unfold.
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