Bitcoin's safe haven narrative recently crashed when the digital asset plummeted below $ 4,000. Critics of Bitcoin and cryptocurrencies now say more than ever that digital assets like cryptocurrencies are extremely volatile, do not hold their value, and are not safe havens.
Changpeng Zhao, CEO of Binance, has always been a great advocate for Bitcoin and cryptocurrencies in general. In a recent blog about Binance, Zhao notes that he still believes that Bitcoin is a safe haven, but that not everything is black and white.
Basically bitcoin or cryptocurrencies have not changed. They still work They still have a limited supply, no one can arbitrarily print more. With the fiat printed at a record pace, you decide what will happen in time.
Zhao has also recently tweeted a mysterious message about Bitcoin, stating that he will not allow the digital asset to go to zero as long as he has a 'penny' left.
Still worried about #btc going to 0?
No! So long as I have a penny left, it won't happen.
– CZ Binance 🔶🔶🔶 (@cz_binance) March 17, 2020
What is the real reason for Bitcoin's crash then?
According to Zhao, the main reason why Bitcoin and the market collapsed is simply a matter of new people investing in cryptocurrencies selling their assets due to panic, and people who were forced to sell some of their assets to pay other expenses like your rent or whatever they are.
So indirectly, Bitcoin was definitely influenced by the Coronavirus, but only because people lost a lot of money in traditional stocks, indices, and even oil, which has taken a massive hit.
"When the stock market crashes, more people will feel the cash crisis to a greater extent, and therefore a greater conviction to sell Bitcoin in the short term as well."
Zhao also comments on the fact that gold prices, while not falling as sharply, also did not rise, which is somewhat expected in these situations. Furthermore, the huge difference in size between the stock market and cryptocurrencies also plays a massive factor.
"People who accumulate cash will eventually discover that they no longer need to accumulate it and will return it on investment."
Is Bitcoin currently outperforming the traditional stock market?
It seems that Changpeng Zhao might be right after all, as Bitcoin and the entire cryptocurrency market have seen quite a significant recovery in recent days. The stock market continued to receive great successes, while Bitcoin managed to see an 83% price rise to $ 6,900.
In fact, according to recent news, the Italian government has allowed Italian banks to open up Bitcoin trading to around 1.2 million during its current blockade. Italy has been the European country most affected by the coronavirus outbreak with around 47,000 official cases and more than 4,000 deaths.
It seems that cryptocurrencies have received a lot of help from Italian institutions recently and support is expected to grow in the coming months.
As markets around the world continue to fall, most governments are desperately trying to help markets by printing a large amount of money that in return creates inflation and devalues their own currencies in the long term.
A recent ‘Vis’ tweet shows how different countries are printing a huge amount of money to save their own markets.
Federal Reserve just printed $ 700B
European Central Bank just printed € 750B
Bank of England just printed £ 400B
Bank of Japan just printed ¥ 12T
People’s Bank of China just printed ¥ 550B
South Korea just printed ₩ 11.7T
This is why Bitcoin was created.
– Vis (@Vis_in_numeris) March 19, 2020
However, it seems that even after the US Federal Reserve Printing over $ 1 trillion and lowering interest rates to practically zero, the stock market is still hurting as cryptocurrencies are recovering.