Bitcoin remained "steady as a mountain" during the economic downturn in 2020








As cryptocurrencies like Bitcoin continue to grow and gain interest around the world, many people continue to see it as a safe haven asset that can provide a lot of utility, especially in times like this. According to many analysts, the market is currently on the verge of recession worldwide. In such a scenario, many people have speculated on the role of cryptocurrencies.


Did Bitcoin emerge when the 2020 recession began?


In the latest episode of Blockcrunch, Jeff Dorman, CIO at Arca Funds, built on how digital assets will operate in such market conditions and whether it will be affected by the recession. In a downturn environment, Dorman believes that cryptocurrencies and digital assets like Bitcoin will not be severely affected.


“In the digital asset space, there's no attachment to cash flow. It is not tied to sales in many cases and even without customers. This is actually the third part of the capitalization structure, and it is a requirement for future services or a customer's growth requirement and it does not slow down in a recession. ”


Comparing Bitcoin's value as a future requirement, Dorman stressed:


“It does not decline because other things are struggling. And that really is a way of understanding digital assets. Today, there is no difference from the previous two weeks or six weeks ago about the valuation. ”


Actually, in a post on blog Dorman's recent CIO Arca Funds has emphasized the sale of digital assets primarily as a means to redeem at lower prices and not necessarily as a sell-off.


“High-class stocks are being sold because they are overvalued amid expected earnings and investors have given up some efforts after a decade of artificially comfortable periods. In the meantime, digital assets are mostly sold by people who simply believe they will be able to buy them back for less. ”


Did Bitcoin emerge when the 2020 recession began?


Source: Macro Assets - Real fluctuation of 1M


Such behavior is consistent with the nature of investors in the market, especially due to unpredictable and volatile prices in the past few months. In fact, according to market data from Skew, Bitcoin, Gold and S&P 500, all have seen a surge in volatility since the beginning of March, which shows that the market is very unpredictable.


Compared to the stock market, Dorman highlighted cryptocurrencies, "without a true intrinsic value bottom, but at the same time, this is the only asset type on the planet that isn't really affected by the recession." .


Dorman was not the first to make a point about the recent recession. Changpeng Zhao, CEO of Binance, emphasized that the 2020 recession is different from 2008 and explained the role of cryptocurrencies:


“In 2008, we didn't have many options but hoped the system that caused the problem would heal itself miraculously. But this time, people have more choices like short or long Bitcoin. ”


Mr. Teacher


According to Ambcrypto




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