Bitcoin has been known to be a pretty resilient and robust asset having been born out of a financial crisis with the lofty ambitions to be a hedge against failing banks. Through the last 10 years, the coin has ebbed and flowed in its aim to be a decentralized financial system, and is still a little lost in its designation.
However, in recent times, the mainstream media attention around Bitcoin has escalated and it has taken another shot in the arm in its journey to being integrated as some sort of financial system. However, there have been certain events that have put it on the back foot in recent years — such as the 2018 bear market — but it has been able to cope with these setbacks.
The only problem is that Bitcoin cannot keep facing major setbacks and expect to be taken seriously as an asset, a financial system, or a currency, in the mainstream — even blockchain technology is under threat if it can’t find its killer app soon.
Bitcoin and blockchain technology started receiving an ultimatum for 2020 to prove itself, and unfortunately, 2020has become a nightmare year for the global economy. And for this reason, Galaxy Digital founder Mike Novogratz sees this year as make-or-break for cryptocurrency.
This is what it was made for
In a tweet, Novagratz highlighted the fact that Bitcoin was created out of a financial crisis and despite it feeling the same sting as the traditional markets, it presents an opportunity for bitcoin to shine.
“$BTC will continue to be volatile over the next few months but the macro backdrop is WHY it was created. This will be and needs to be BTC’s year,” he tweeted.
Part of the belief that Bitcoin can find itself in this financial crisis is that many believed that Bitcoin would be a perfect hedge in the time of financial uncertainty as it had no ties to the traditional and institutional markets.
This however did not turn out to be true as the drive to entice institutional investors into the Bitcoin market backfired in this instance. Big money investors from the traditional space felt the pinch of the market collapse but they still did not believe in Bitcoin as being a hedge so pulled money out — rather than pumping money in and driving the safe haven narrative.
Bitcoin to the rescue?
The way in which the global markets are currently going — including Bitcoin — does not inspire much confidence. But, if there is an asset that is doing better, than worse, it probably is Bitcoin which bounced back briefly to reclaim 90 percent of its Covid-19 induced losses.
More so, Bitcoin may have fallen back, but it has found a level of support which is far above its lowest point, and this is amid the continuing stresses of the stock markets which are shedding more and more value week on week.