Bitcoin has been expanding during the last few days showing that the worst may have passed for the cryptocurrency market amid the Coronavirus crisis that affected traditional markets around the world. However, as Bitcoin gets stabilized, one of the questions the community is asking is whether Bitcoin worked as expected during a financial crisis.
Did Bitcoin Become a Store of Value?
According to Peter Brandt, a recognized crypto chartist and analyst, he does not personally think that Bitcoin has time to show why it was invented for. He answered a question made by a Twitter user regarding Bitcoins’s future and the coming 24 months.
Mr. Brandt commented about it:
“I do not personally think BTC even has that much time to declare itself true or false.”
I do not personally think BTC even has that much time to declare itself true or false
— Peter Brandt (@PeterLBrandt) March 26, 2020
It is worth mentioning that the first 45 days of the year were very bullish for Bitcoin. The virtual currency was reaching new yearly highs almost every two days. However, this stopped when the markets plummetted in mid February amid the Coronavirus expansion in Europe and other countries around the world.
Since February 15, Bitcoin showed it behaved as traditional markets. Its price highly correlated to the S&P 500 and other financial assets. This can be an example of how the most popular digital asset worked as a risk-on asset rather than as a store of value during periods of crisis.
Of course, nobody knew what was going to happen with BTC. The community was divided between those that supposed Bitcoin was going to become a great store of value and those that thought that Bitcoin didn’t have a good future ahead.
Early this year, Mr. Brandt considered that Bitcoin was entering a new bull market that could have helped the virtual currency reach a new all-time high of $100,000. Furthermore, Peter Brandt mentioned a few days ago that precious metals, including gold and Bitcoin, should be considered catastrophic insurance policies rather than investments.
As the premium is paid, the goal is for the policy not to be used and needed. However, the owner gets protected against a worst-case scenario. Brandt consideres that silver is not a store of value and that gold is following inflation-adjusted levels from 40 years ago.
Now, Bitcoin can be purchased for $6,600. The main question is for how long it will keep around that level and which is going to be the next step.