Unemployment in the United States has reached new heights, as the economic crisis caused by the coronavirus pandemic continues—not that BitcoinBitcoin or stock markets are showing it.
CryptoCrypto market cap surged by $13 billion over the past 24 hours after Bitcoin briefly struck $10,000 per coin yesterday as the anticipation of next Tuesday’s halving grows. (The Bitcoin halving is a once-in-four-years event that halves mining rewards on Bitcoin’s blockchain, reducing supply and keeping inflation in check.)
Bitcoin hitting five figures had not happened since mid-February. Other major crypto assets, such as Ethereum and Ripple’s XRP, have experienced marginal gains of less than 1%. All in all, total market cap for all cryptocurrencies now exceeds $268 billion.
Meanwhile, the Dow Jones Industrial Average (DJIA) closed today trading 400 points higher than the day before. In a recent newsletter, Mati Greenspan—founder of Quantum Economics—said Bitcoin and stocks have “been at their highest correlation on record for the last two months.” Today’s bullish figures suggest the “decoupling” of crypto from the stock market hasn’t happened just yet.
What is decoupled, according to Greenspan, is the relationship between the US economy and the stock market. And, by extension, the same would apply to the crypto market as well.
Despite positive swings in both markets, unemployment in America has surged to a “depression-era” level past 14%. The Labor Department estimates that as many as 20.5 million jobs disappeared last month. The good news is that roughly 75% percent of those job losses are considered “temporary” due to current COVID-19 conditions.
Will Bitcoin's price be above $10,000 at the halving?
Yesterday, Bitcoin’s price briefly hit $10,000, the highest it’s been since February, before falling back down somewhat. Today’s it’s back, testing the numerical milestone, currently at $9,984 at time of writing. In just four days, the amount of Bitcoin that miners receive for mining new blocks on the Bitcoin blockchain will cut in half. This takes place every four years due to a monetary policy hardcoded into the Bitcoin consensus protocol. This is known as the Bitcoin halving. Theoretically,...
This could be why markets aren’t reacting to the unemployment numbers. Analysts also point out that despite the poor job figures, many of the jobs lost in April were in specific industries, such as travel and hospitality. In addition, several states—such as California and Florida—saw various stores and “low-risk retailers” open today in attempts to gradually alleviate protective measures against the coronavirus.
Meanwhile, Apple said today that it's planning to begin reopening stores next week in states like Idaho and Alaska. Disney World is also looking to reopen in stages starting later this month.
Maybe that optimism that the worst is now behind us is “priced in.”
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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
