- On the heat of the 2008 banking crisis, the first cryptocurrency, bitcoin, was introduced by Satoshi Nakamoto.
- For many years, bitcoin has been proved as a ‘safe-haven’ for the crypto traders.
- Some of the bitcoin influencers find the drop of bitcoin as unpredictable and misleading.
It’s a truth that the cryptocurrency has been untouched by the economic stagnation. The world has spread its arm to welcome this virtual currency and putting a step towards the digital ecosystem.
Evolution of the first cryptocurrency
On the heat of the 2008 banking crisis, the first cryptocurrency, bitcoin, was introduced by Satoshi Nakamoto. He aimed to overrule the monetary system backed by central banks via injecting the market with the heap of digital currency. It was designed as a peer-to-peer financial network and was recognized as a new variant of money.
Since then, the Bitcoin has upheld its position and is giving a tough competition to its competitors. However, other currencies have thrived, but bitcoin proved as prominent above all other cryptocurrencies. Capturing approximately 65% of the total cryptocurrency market capitalization.
Moreover, the earlier classification of Bitcoin as an asset has been changed from Nakamoto’s original vision. It is recognized as a ‘store of value’ with the investors choosing to ‘hodl’ instead of spending their digital currency.
Striking the belief of bitcoin as a ‘safe-haven’
For many years, bitcoin has been proved as a ‘safe-haven’ for the crypto traders. Some also named it as a ‘digital gold’ that was uncorrelated with the drift of stock markets. This utterance was assumed true till the last week when the coronavirus breakdown bothered the whole market.
Some of the bitcoin influencers find the drop of bitcoin as unpredictable and misleading. Where other opponents have been tumbling from their position, bitcoin was losing its status as a ‘safe-haven.’
The Co-founder of Gemini tweeted on February 27, 2020, there was an issue assuming bitcoin as a safe harbor. The bitcoin market has never faced a significant crash or recession in the broad ecosystem until today, but the theory has changed.
At some point people will wake up and realize that bitcoin is the best safe haven asset the world has ever seen. Until then, opportunity abounds.
— Tyler Winklevoss (@tylerwinklevoss) February 27, 2020
Bitcoin has fully collapsed with a 50% drop in the last 24-hours. Though, stock markets have been also drooped down but were five times less than the situation of bitcoin.
With the market in a panic and the investors worried about losing their money with a mindset of pulling the money from the sharemarket and who will invest in even unsafe assets?
Some optimistic speculators encourage people to buy bitcoin if they are concerned about the safety and security of their currency in the period of recession.
Although the prices of cryptocurrencies have dropped, it was assumed that bitcoin has further dived to $4,000 and there is massive damage to the stocks as well. It is unpredictable for the next few days what will be the scenario of this unstable market.