Bitcoin Market Analysis: Opposite of 'Store of Value'

This piece takes a critical look at the idea that Bitcoin is somehow a 'store of value'


4 min read
Bitcoin Market Analysis: Opposite of 'Store of Value'

We covered a lot of the 'happenings' of Bitcoin via some of our other platforms (Librehash).

So this price analysis will serve as more of an 'aggregate' of everything we discussed.

Bitcoin is a 'Different' Kind of Bearish

What we mean by that is...we're bearish, but not because there is a ton of bearish sentiment or residual bearish momentum.

On the contrary, the markets clearly recovered spectacularly after the cryto space was drowned along with every other global finacial market during the February / March stock meltdowns

(Fun Fact: March 16th was as crazy as it felt. Its officially the second worst day in U.S. stock market history, beating every single record set during the Great Depression stock market crashes; not tomake anyone panic or anything but...yeah)

Unfortunately for Bitcoin, the losses that it took were exponentially worse:

'Why Are You Bringing This Up?'

Because its going to be very relevant in the near future (we believe)

Fundamental Analysis Time

On the basis of what we saw on that day (in addition to a half dozen other similar-ish occurrences), we feel confident in asserting that Bitcoin is not considered to be a 'store of value' by investors / citizens at large.

And if it is, then that mentality doesn't extend as far as leading people to seek it out (increase demand) to hedge against uncertainty in legacy financial markets.

In fact, when taking into account the fact that Bitcoin suffered losses that were a few orders of magnitude greater than the legacy markets (in chrous with the broader crypto space), it would be fair to throw out the idea that Bitcoin is treated as the opposite of a store of value and that, when shit hits the fan, investors put it at the very top of their, 'What will I sell first in a panic / crazy situation where I'm simply looking to pull out of the markets as quickly as possible & salvage as much of my remaining investment as possible).

Potential Looming Global Recession Makes This Something Worth Considering

We won't pretend to be financial epxerts, but we do observe the opinions, reports & data provided by those that are.

And thus far, there is an almost near consensus (globally) that a global financial recession is all but inevitable.

Below is a List Containing Notable Financial Firms / Thinktanks / Agencies That Have Echoed This Statement

A Comprehensive Report From the IMF Detailing Why Their Current Forecast is That Major Global Economic Recession is on the Horizon (notably one that they claim will dwarf what we all experienced in 2009); this report was published = https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020

Goldman Sachs Published a Report in March 2020, Publicly Forecasting Grim Economic Times for the United States on the Horizon =  https://www.goldmansachs.com/insights/pages/roaring-into-recession.html

Bloomberg Published a Piece Recently, Claiming That Their 'Recession Indicator' Forecasted a 100% Chance of Recession Within the Next 12 Months (we don't vouch for the usefulness of this metric, competency of the ones that made it or the capabilities of the writer / person ultimately responsible for extracting this reading from it) = https://www.bloomberg.com/graphics/us-economic-recession-tracker/

Coronavirus Sealed This Too

The math (from COVID19 going forward), spelled out how the 'demise' may manifest pretty clearly.

Economic Impact of COVID

one second of Science here: The best way to deal with a virus like COVID (from what we've heard), is to encourage individual isolation / distancing in order to curb its spread.

Financial Issue

People can't go outside. People don't spend money. They also don't work.

Dissecting the cause of the financial panic and uncertainty is truly that simple, but assessing / forecast what the literal impact will be in the future going forward is speculative at best.

What we can say for sure is that all common sense & rationality points us toward the idea that this global pandemic may have set about a chain of events that will ultimately lead to a market downturn.

A Recession Isn't the Issue / Worry / Point of Contention - its Severity is

In the modern era of finance, we accept the realities of 'boom' / 'bust' market cycles.

What comes up must go down and all bull runs are expected to be coupled with periods of exhaustion, contraction or occasional bear markets that follow afterwards.

Conclusion (Tying it All Together)

It appears that we're headed toward a global financial slow down. We've proven consensus via comprehensive research from giants in the legacy financial space + international firms.

Ample financial data backs up the idea that Bitcoin receives the worst of global sell offs.

Based on the above, we would be remiss if we didn't equate a bearish global forecast with a bearish Bitcoin forecast.

Thus, from this point going forward - we're going to start taking a closer look at the legacy financial markets in order to better anticipate Bitcoin's trajectory in the future moving forward.

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