While traditional markets experience coronavirus fears fuelled volatility, it might be still too soon to tell how would really perform during a period of serious financial turmoil. However, the fact that bitcoin is a “trustless asset” might be a major advantage in difficult times.
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Bitcoin is “so new” that it’s still difficult to tell how it will react to changing circumstances in the financial markets, Teddy Fusaro, Chief Operating Officer (COO) at crypto investment firm Bitwise Asset Management, said in an interview with Cheddar this week.
“The thing to remember about bitcoin is that it’s so new, it hasn’t been through a phase like this before. It was born in the financial crisis, so this is a new period of time for bitcoin. It has not reacted the way that many people expected it to, but it has also been a very short window of time to measure its performance,” Fusaro said.
Asked about how the number one digital asset is likely to perform in a situation where both the stock market and broader economy takes a hit from coronavirus fears, the COO once again stressed that “we do not know how it’s gonna perform,” before adding “but we do think it’s going to be an interesting asset to watch.”
The COO then went on to explain why he thinks that the fact that bitcoin is a “trustless asset” is likely to be a major advantage:
“The primary concern that I have about the current dynamics […] has to do with trust. Trust that we’re hearing the right thing from the government about how we’re reacting to the outbreak of the coronavirus, trust that our institutions are going to deal with it […] The thing that it takes me back to is that Bitcoin’s design is a type of trustless institution […] and in times like these it’s worth considering the philosophies upon which Bitcoin is based,” the Bitwise executive said.
In addition to crypto-focused firms like Bitwise, however, people from outside the space also appear to be warming up to the idea of bitcoin being an uncorrelated asset class that even mainstream investors should take advantage of.
