Oil helped revive the bitcoin
|Bitcoin bounced up 3% a day, exceeding $7000 again. At the time of writing, the benchmark cryptocurrency had stopped slightly above $7100. This hardly caused widespread enthusiasm among the participants in the crypto market, as bitcoin had already been at these levels recently, but could not hold the ground. Altcoins obediently duplicate the dynamics of the first cryptocurrency, showing an increase of 3-6% within the TOP-10 digital currencies. The total capitalization of the crypto market has grown by $5 billion over the last 24 hours.
Ethereum (ETH) and Tezos (XTZ) demonstrated the highest weekly growth among the leading altcoins with an increase of 12% and 20% respectively. Among the "second echelon", the anonymous coin ZCash (ZEC) shows the highest growth for seven days with the growth of more than 20%.
Market participants assume that the reason for the new rebound of the bitcoin may be a correlation with S&P and even with the oil market. One could write everything off as a coincidence, but such events happen more and more often. Of course, Bitcoin is not pegged to oil or stocks but there is another crucial interlink between these assets - institutional investors who classify bitcoin as a risk asset.
Oil has become a new barometer of global economic health. Trump's latest threats against Iran and stimulus packages are indeed creating short-term speculative waves in the oil market, which are echoing in the stock market and boosting other risk assets, including Bitcoin. The open question remains: can long-term investors rely on these movements?
We are running out of storage facilities for raw materials, and the money printing press has become some stock market's lung ventilator, just as Bitcoin is having difficulties with the realization of an original idea of p2p transactions. It is likely that as the global crisis approaches, the opportunities for speculation may be severely limited at the government level.
Bitcoin has moved quickly from a "rebel" asset to an unbelievable correlation with oil and stocks recently. And it is far from certain that a decline in institutional investors' influence on the crypto market will hurt the prospects for the first coin and the crypto market as a whole. It is worth remembering that it was within the framework of the 'social economy' that the crypto received its most powerful impulse.
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