Well this is embarrassing. Just weeks after we were forced to admit there was a cracking use-case for bitcoin, we've once again been left red-faced. Bitcoin has risen while other risky things have fallen, and in so doing has proven, once and for all, that it is a safe-haven asset.
Don't believe in central banks? No worries. Bitcoin is the US 10-year Treasury of the modern era. It hit a nine-month high on Sunday of around $7,400. Nuff said.
For proof of its risk-free credentials, look no further than Twitter, where you will find plenty of cool-headed market commentary, featuring lists of high-risk things (like shares in actual companies and the currency of the world's second-biggest economy) in the red, and safe things (like bitcoin) in the green.
As one example, here's chart crime maestro Holger Zschaepitz:
What about that Binance hack last week though, when $40m of bitcoin was stolen by hackers? Doesn't matter. Bitcoin still exists, so the hack only makes it stronger.
From Reuters this morning:
Other market participants said perceptions of bitcoin’s resilience in the wake of last week’s $40 million theft from the major Binance exchange was supporting sentiment.
Not only is bitcoin resilient, though. It's defiant. From City AM:
The nine-month high comes after a recent surge in value for Bitcoin, which has defied concerns over the US-China trade war to jump more than 20 per cent over the last week.
What if bitcoin's jump was something more specific? Something more substantive? Something more meaningful? Could we be seeing a pivot in the land of alt-bro finance? Could those who queued up outside Metro Bank to get their money out have put it straight into bitcoin? Or perhaps it was retail investor bros pivoting from Uber to crypto (following last week's IPO flop) wot dun it?
All very confusing. Some — like cypto-trolls David Gerard and Bitfinexed — are speculating that it is in fact the $800m worth of Tether released into the crypto market in the past month or so that has pushed up the price.
Others are spreading FUD about a looming bitcoin bubble and troubles at
Tether crypto exchange Bitfinex. From Preston Byrne:
I will not dwell at length about Bitfinex’s current drama, save to say that individuals who have allegedly done business with Bitfinex are under federal indictment, assets managed by those individuals have been seized, and Bitfinex itself is known to be under investigation for alleged fraud by the attorney-general of New York.
Flight to safety sounds a lot more likely if you ask us. If by safety you mean the highest risk thing that you can possibly get your hands on. The thing is, the concept of a safe haven is a self-fulfilling prophecy, isn't it? If you say enough times that bitcoin goes up when stocks go down, people will buy bitcoin when stocks go down. Even if it is the very antithesis of all things safe and havenish.
At least Twitter's bots allow you to see through the noise though. Type “bitcoin” into the search bar and (depending on who you follow) you'll get bitcoin bros retweeting themselves . . .
. . . and an excellent podcast on the people who made Apollo 11 happen (“to the Moon” = bitcoin in botland):
ROUBINI: Gold Is In A Hyperboilic Bubble — Business Insider
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