Bitcoin (BTC) has been severely affected in the last few weeks due to the sell-off that stocks and other assets have experienced. In addition to it, Bitcoin behaved like a risk asset rather than as a store of value, something that harmed the suppositions many crypto users had about Bitcoin.
According to Su Zhu, the CEO of Three Arrows Capital, Bitcoin could get to $50,000 levels relatively quickly as emerging markets increase their problems. During the last days, EM Markets and some developed countries experienced a devaluation of their currencies.
Bitcoiners’ Moment Arrived
Mr. Su Zhu explained that this is the moment that most crypto investors and long-term believers in virtual currencies have been waiting for. Emerging markets have seen their currencies devaluate between 20% and 30% – if not more – in the last weeks or months. This is certainly closely related to the Coronavirus outbreak and how this pandemic has affected the financial landscape around the world.
At the same time, EMs are also pricing in significant risk of sovereign defaults, which is making things much more difficult to deal with. As Su Zhu said, if Bitcoin market holds the current levels, it may be possible for it to reach $50,000 relatively quickly.
On the matter, Su Zhu wrote:
“This is, in theory, the moment Bitcoiners have been waiting for. Several EM markets are now pricing in significant risk of sovereign defaults. The USD itself set on an inflationary course will be hard to turn back from. If BTC market hold these levels, $50,000 relatively quickly is possible.”
This is in theory the moment Bitcoiners have been waiting for
Several EM mkts are now pricing in significant risk of sovereign defaults
USD itself set on an inflationary course it will be hard to turn back from
— Su Zhu (@zhusu) March 18, 2020
Bitcoin has always been considered a store of value and an asset that would be used by individuals and companies during a crisis to protect their money and investments. Nonetheless, for the last two weeks, Bitcoin behaved as most risk assets such as stocks.
In the recent last two days, Bitcoin seemed to be traded stably compared to EMs currencies that massively devaluated or stocks that continue falling. The financial crisis that the current Coronavirus outbreak is producing would have negative effects on the entire world.
This could be the moment for BTC to surge and grow as a store of value considering EM markets are being massively affected. At the time of writing this article, Bitcoin is being traded around $5,330 and it has a market cap of $97.48 billion.