Bitcoin prices fell below Monday’s key psychological threshold as financial markets intensified sales, but cryptocurrency experts believe they are likely to be better than other asset classes if the World Trade War is dragged over.
The cryptocurrency traded around the clock was $79,000pm on Monday. It has decreased slightly since the morning, recovering some of the previous losses. So far, this year it has dropped by around 15%.
Bitcoin is a digital currency and virtual payment system designed to exist outside the control of central entities, as opposed to Fiat currencies controlled by governments such as the US dollar and Swiss franc.
Many cryptocurrency prices have skyrocketed after the November election, when Donald Trump pledged to cut regulations and create a strategic Bitcoin reserve. Trump also launched memecoin days before its launch in January.
“Because election stocks are falling and Bitcoin is rising,” said Matthew Sigel, head of digital assets research at Vaneck, which has $113.8 billion in managed assets, including some cryptocurrency funds. “It feels like the White House’s attempts to sort global trade are actually working in Bitcoin and Crypto’s profits.”
Despite its origins as an alternative asset class, Bitcoin tended to trade in the same direction as risky stocks. As global financial defeats continued, Bitcoin was also sold, said Austin Campbell, a professor at Stern Business School at New York University. However, as global markets lose faith in the US dollar, this is mitigated by another trend. It has long been seen as the most important currency in the world.
“So far, history shows that there is no other individual currency that people are now ralliing,” Campbell said. “Instead, you’ll look at Gold and Bitcoin as neutral assets, valuable stores, the kind that’s been used for thousands of years. And in the case of Bitcoin, you’re going to be the digital version of gold.”
So, Bitcoin is moving up and down, but in some way it hasn’t made many big moves, Campbell said.
Bitcoin has long had true followers, but there were also detractors who questioned their purpose. However, Sigel told USA Today, “We’re very positive about Bitcoin in the long run. We’re continuing to adopt it.”
Since early 2024, funds traded on the exchanges have been able to hold Bitcoin, rather than simply futures contracts related to their prices. Today, many large companies hold cryptocurrencies on their balance sheets, Siegel noted. “We have a high belief that continues.”