Even though Bitcoin's price has been quite volatile during the COVID-19 crisis, Michael Novogratz, a former Goldman Sachs partner, as well as Founder, Chairman, and CEO of crypto-focused merchant bank Galaxy Digital, believes that 2020 will Bitcoin's year.
World Health Organization (WHO) says that the first time it heard about a COVID-19 case was on 31 December 2019 when "the WHO China Country Office was informed of cases of pneumonia unknown etiology (unknown cause) detected in Wuhan City, Hubei Province of China"
According to data from CryptoCompare, Bitcoin started the year at $7,189, reached $10,360 (its highest price this year) on February 14, fell to as low as $4,240 (its lowest price this year) on March 13, and is currently (as of 09:30 UTC on March 23) hovering around the $5,800 level:
This means that in the year-to-date (YTD) period, Bitcoin has lost 19.32% of its value. This has naturally disappointed those Bitcoiners who were expecting the flagship cryptocurrency, which many of its fans refer to as "digital gold", to serve as a better store of value. By comparison, during the same period, the price of physical gold has gone from $1,519 to $1,491, i.e. a loss of only 1.84%.
Although before the COVID-19 outbreak many people had claimed that Bitcoin was a non-correlated financial asset, during this pandemic, Bitcoin has shown a high degree of correlation with the S&P 500 Index, which has fallen 28.66% in the YTD period:
Crypto startup Santiment, which focuses on behavior analytics, commented on this correlation on March 20:
With #Bitcoin’s correlation with the #SP500 currently at a 2-year high, we have just released an in-depth research article into what we can collectively learn in regard to this unprecendented downturn among both markets.https://t.co/LZnfqYHdzS
1) #BTC's correlation with the pic.twitter.com/RRLtaU5UVY
— Santiment (@santimentfeed) March 20, 2020
traditional equity markets appears cyclical, moving from negative to positive historically. With this pandemic, we are obviously seeing very similar movements in tandem as the #coronavirus justifiably has investors in virtually every sector in a similar state of cautiousness. pic.twitter.com/Y2WZKEkBsb
— Santiment (@santimentfeed) March 20, 2020
2) Over the course of $BTC's history, when correlation is high with the #SP500, it typically is accompanied with major downturns in #crypto. In other words, the #1 market cap coin performs best when it has very little movement dependent on traditional markets.
— Santiment (@santimentfeed) March 20, 2020
3) Any subsequent bounce-backs over time are typically foreshadowed by a growing ‘decoupling’ between $BTC and the S&P. We should see a clear sign of an impending uptrend when this correlation line is beginning to approach 0 (or lower) again.
— Santiment (@santimentfeed) March 20, 2020
Although Novogratz's confidence in Bitcoin seemed low on March 13 when he tweeted that "global confidence in just about anything" (including Bitcoin) had "evaporated", Bitcoin's 36.79% bounce back since then -- i.e. from $4,240 to $5,800 -- seems to have renewed his confidence in Bitcoin because on Sunday (March 22), he sent out the following tweet:
$btc will continue to be volatile over the next few months but the macro backdrop is WHY it was created. This will be and needs to be BTC’s year.
— Michael Novogratz (@novogratz) March 22, 2020
Perhaps the most interesting reply to Novogratz's tweet was from Bill Barhydt, the Founder and CEO of crypto startup Abra:
I should clarify... it's highly possible we go to $3k before $100k. I'm not an oracle and don't play one on TV either.
— Bill Barhydt (@billbarhydt) March 23, 2020
Crypto influencer Ran Neuner also seemed bullish about the outlook for Bitcoin after watching an interview with Neel Kashkari, head of the Federal Reserve Bank of Minneapolis, on American TV (CBS) news program "60 Minutes", during which Kashkari said there is "an infinite amount of cash" at the Federal Reserve (America's central bank):
Look, they made an ad for Bitcoin. https://t.co/XPu4i3TQOS
— Ran NeuNer (@cryptomanran) March 23, 2020
