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Since its inception in 2009, Bitcoin in many instances has proved its various attributes in the financial sector of the world. Many Bitcoin admirers and analysts have called it a ‘safe haven’ that acts as a hedge against inflation, at the same time standing at times of adversity.
So far, Bitcoin has successfully shown its potential as an asset in the financial world, now several analysts and experts predict that the current geopolitical situation will be like a catalyst in surging the prices of the flagship currency. On February 28, Bitcoin had a great 14% rally, however, since then Bitcoin has struggled in continuing this momentum. The flagship currency also faced some horrible days after bulls were unsuccessful in pushing its price beyond $45,000 before March 4’s options expiry.
However, contrary to what many analysts predicted, Bitcoin’s performance wasn’t that great in the backdrop of Russia’s invasion of Ukraine. Meanwhile, the price of crude oil reached its highest since 2008 due to the ongoing political situation, as was predicted by several economists that inflation will rise with the current situation. Inflation has already reached its highest in four decades.
Among the concerns of a potential global war rising, the financial scene is already becoming quite messy. Investors eagerly want to secure their investments, which led to the prediction that the situation will benefit Bitcoin and the crypto market in general.
The government of Ukraine has already confided in digital currencies as the country is stuck in turmoil. The flagship currency here led the way as the government utilized the digital assets for various significant purposes such as buying military equipment such as bulletproof vests and night goggles and processing transactions. The Ukrainian government raised millions in crypto, which again was expected to boost the crypto ecosystem.
It was expected that the flagship currency would be traded independently, however, it seems to be facing the same fate as the stocks in the mainstream financial markets. As per an analyst, the correlation of Bitcoin with the EPU index was negative, earlier this month.
Now, the catch here is that a negative correlation signals that in times of growing uncertainty, Bitcoin is expected to fall which critics quickly pointed out will be in exact contrast to what is expected from a hedge.
At the time of writing, Bitcoin was exchanging hands at $41,725.36, down 0.14% in the last 24 hours. In the past, the world has witnessed the leading cryptocurrency by market cap being resilient and crossing hurdles as it comes in its iconic journey. At this point, the price of Bitcoin might be going through a rough patch, it has a proven record of overcoming such situations, however.
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Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
