The users of cryptocurrencies have seen a rise in the value of bitcoin since its inception. The same for the Bitcoin is also noted by leading global investors in the past some days as per the reports. The CEO of Binance, Changpeng Zhao, said that Bitcoin is now in a stable zone and it will break out of the current range. The price of Bitcoin is hovering around the $9000-$10000 mark in recent months. It recently crossed the high of $10000 but could not sustain that momentum. In terms of volatility, this is at a record low even though it has seen some big moves in the last few weeks.
Bitcoin is no safe haven
The Binance CEO also went on to add that Bitcoin was always connected to other markets, and it should not be regarded as a safe haven asset. The crypto market is still fresh, and it should not be considered safe when other markets are moving downwards. In fact, it goes with the traditional markets in most cases. He also warned that due to the large size of the stock market, people might rush to liquidate crypto assets in times of need when the stock markets start to fall. In this way, on the downside, crypto markets can underperform the stock markets.
Why is Bitcoin rallying?
If we observe the current trends in the market, we can notice that central banks are going all out to help the stranded economy and announcing large scale stimulus packages. The situation is no different in other countries, and all of them are on the same path. In this situation, the currencies are getting devalued to a large extent as the government decides to print more money. This is forcing some of the traditional investors to switch from regular currencies to cryptocurrencies for a short duration.
Apart from that, it is also seen that some investors are hedging their positions with Bitcoin so that they can get some security when the markets begin to fall. There is also an opinion that this can be used as a hedge against inflation. Even though the inflation levels are not too high at the moment, it is just a matter of time before we get to see high levels of inflation as the government has given a lot of stimulus. In this situation, investing in cryptocurrencies can provide some cover for other investments.