Bitcoin continues to be uncertain of its place in the global markets. The coin has been called a global markets hedge and been aligned to more of a ‘digital gold’, but at the same time, it has failed to impress as an anti-correlated asset, following the stock markets down on many occasions.
However, there are still arguments both way for the coin. There have been instances where a weakening US Dollar has seen the price of Bitcoin grow as it shows its potential as a hedge, and more recently, the potential end of the Covid-19 pandemic in sight has tanked the price of the coin.
This occurrence shows that Bitcoin is less suited to a world back on track and growing economies. The end of Covid-19 would mean a return to stronger markets and less need for a hedge, and this is shown in the Bitcoin price.
Whether this is enough to call Bitcoin a full hedge again remains to be seen, but its place, and price in a post-Covid-19 world will certainly have an effect on its direction.
Bitcoin down $1,000 on Pfizer news
On Monday, pharmaceutical company Pfizer, in collaboration with biotech company BioNTech, announced a breakthrough in its COVID-19 vaccine. Bitcoin fell approximately $1,000, over 6%, between on the vaccine news, from $15,800 down to a daily low near $14,815.
The vaccine, however, still awaits final approval from the United States Food and Drug Administration:
“Submission for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration (FDA) planned for soon after the required safety milestone is achieved, which is currently expected to occur in the third week of November.”
The notion that Bitcoin is behaving more like an anti-correlated asset was further bolstered when, at this vaccine news, the rest of the global markets mostly rose. The S&P 500 spoiled up almost 4% in price at market open this morning.
At the same time, gold, another store-of-value asset, has fallen more than 5% and looks to be falling even more.
The news of a vaccine and the greater implications it could have on the globe and getting back to normal is even being felt across individual stocks. . Video conferencing platform Zoom watched its stock decline by approximately 19%, while Netflix fell almost 10%. Even e-commerce giant Amazon dropped more than 5%. This seems to add to the narrative that Bitcoin is good in a global crisis, unlike stocks and general markets.