Is Bitcoin a store of value correlated to gold or a speculative investment correlated to the stock market? Traders and investors can’t seem to make up their minds, and today is a perfect example.
Earlier today, news of successful testing of a COVID-19 vaccine by Pfizer Labs set the markets moving: stocks soared, gold sank, and Bitcoin dropped by more than $1,000 (10%) within hours. But within the last hour, Bitcoin has regained most of those losses and is currently trading for right around $15,400.
That’s good enough for a 0.30% increase on the day.
The momentary panic may have still spelled terrible news for scalpers and uber bullish traders operating with massive leverage. But the bounce could be viewed as a positive sign for long-term investors, as it potentially sets a limit to how much a brief panic episode can impact the price of Bitcoin at the moment.
For those long-term hodlers, it’s business as usual right now. Bitcoin has not been on a bearish trend since the coronavirus-induced mid-March market crash, and news of a potential vaccine appears to be have been mostly shrugged off by Bitcoin traders.
In fact, the market appears to have been far more impacted by the US election, which Democratic candidate and former Vice President Joe Biden has now secured. Bitcoin set off an even more bullish trend over the weekend when the Associated Press and others called the race for Biden. The previous trend set possible resistance for Bitcoin at around $14,766, but instead Bitcoin’s price touched $16,000 per coin before correcting.
If nothing else, today’s brief drop may help to quell some of the potential overexcitement from Bitcoin traders over the last week. But with a Biden presidency on the horizon, and an administration inclined to dole out greater coronavirus relief and economic stimulus, there may be good reason for Bitcoin holders to be excited.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.