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The March collapse of the bitcoin was the first stress test for a leading cryptocurrency that she gave “mostly positive”. This opinion was expressed by strategists at the biggest US Bank JPMorgan Chase, according to Bloomberg.
Nikolaos Panigirtzoglou and Joshua the Younger, stated in his report titled “Cryptocurrency takes its first stress test: gold, pyrite or something in between?”. During the gold rush mineral pyrite, due to external similarities with the precious metal, gained the nickname “fool’s gold”.
According to them, the behavior of bitcoin prices indicates that cryptocurrencies continue to use as a speculative asset and not as a means of exchange or store of value.
Bitcoin is increasingly correlated with those risky assets such as stocks. During the collapse in March, the price of BTC was volatile, but it also had a place for traditional asset classes, analysts said.
They pointed out positive aspects of the behavior of the asset during the March panic:
- the price of the coin is not much different from the levels of intrinsic value, and therefore only briefly dropped below the cost of mining;
- were few signs of the flow of liquidity within the asset class when investors sought refuge in more secure and liquid parts of the cryptocurrency market. But most altcoins fell at the same time — correlation in the market has grown over the last few months.
“This suggests that the evidence of the dynamics of escape panic, or even multi-level distribution of material quality among cryptocurrency is not a lot even during the crisis in March,” said strategists at JPMorgan.
They also stressed that the market structure of bitcoin were more stable than currencies, stocks, Treasury bonds and gold.
The rebound of bitcoin prices since mid-March. Source: Bloomberg
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We will remind, according to senior analyst on the commodities Bloomberg Intelligence Mike McGlone first cryptovault this year is able to reach a new record price above $20 000
In early June, bitcoin for the first time since February exceeded $10 400, at the time of writing “digital gold” is trading at $9400-9500 (CoinGecko).
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