- Bitcoin prices have been soaring with the news that the leading digital currency hitting the $10,000 mark.
- Mike McGlone, Bloomberg’s Senior Commodity Strategist predicted how Bitcoin could survive more in the market in comparison with Nasdaq – the US stock market index.
Off late, Bitcoin prices have been soaring with the news that the leading digital currency hitting the $10,000 mark. If one were to believe the experts then Bitcoin could soon cross the $15,000 mark in no time.
Mike McGlone, Senior Commodity Strategist – Bloomberg Intelligence, in a tweet predicted how Bitcoin could survive more in the market in comparison with Nasdaq – the US stock market index. His tweet was supported with deep insight on Bitcoin and Nasdaq. He believes that due to increased demand and reduced volatility, Bitcoin has a higher chance of emerging in the market compared to Nasdaq which has been depicting a decline in the supply and higher volatility.
Bitcoin is more likely to sustain higher levels than the Nasdaq due to increasing demand vs. declining supply and reduced volatility vs. the Nasdaq. Central-bank liquidity and fiscal stimulus may limit equity downside, but it's fuel for bull markets in the quasi-currencies…. pic.twitter.com/dOmLjaVMD0
— Mike McGlone (@mikemcglone11) July 28, 2020
Understanding the Argument
There is a reason behind McGlone’s summation as Bitcoins are well known for its volatility. This means that Bitcoin prices have a tendency to move up as well as go down pretty quickly. On the other hand, Nasdaq is not very volatile. i.e. it lacks the ability to recover very fast.
On Monday, the Bitcoin price reached $11,000 from $9,100 in just one week. Experts suggest that this is due to the increased demand. It was noted that traders were deriving enormous gains from DeFi platforms. Subsequently, the investors reinvested these gains back into Bitcoin thus increasing its demand.
Role of Fiscal Stimulus and Liquidity Crisis
It should also be noted that the second US fiscal stimulus package could drive Bitcoin even higher. A fiscal stimulus package is a package of economic measures developed by the government to prevent recession by boosting employment and spending. So, the experts believe that people hoarding the stimulus money are most likely to buy Bitcoins.
Not only this but also due to the central bank liquidity crunch it seems that it may limit the trading of equity in Nasdaq. Putting all the factors together it can be seen that they simply serve as fuel for the bulls in the cryptocurrency market which is correctly pointed out by Mike McGlone in his tweet.