The potential for the bitcoin appreciation remains unshaken even amid the crisis triggered by the coronavirus, has affirmed Safiri Felix, director of the Brazilian Cryptoeconomy Association (ABCripto)to Veja magazine.
In a context where Central Banks around the world are already using their entire arsenal of measures to inject liquidity and calm the markets, it is critical to seek diversification in countercyclical assets, making it vital to seek exposure in instruments whose supply does not change with the influence of monetary loosening, he said.
The report states that before the pandemic of the new coronavirus, the market was working with the expectation of a strong appreciation of the bitcoin, in the wake of the 100% highs in 2019 and the beginning of a promising year. But in mid-March, the virtual currency devalued by 50%, with widespread sale of risky assets and the liquidity race caused by covid-19.
Currently bitcoin has been trading in the range of US$ 10,000. Investors await the bitcoin halving, which will halve the issuance of new units of the virtual currency. The halving of May is the third and arrives surrounded by expectations regarding price behavior.
Bitcoin’s potential is according to Transfero’s thesis
Halving is one of the elements that underlies Transfero Swiss’ special investment thesis that cryptoassets will be the best performing in the current biennium. Firstly, because of the injection of liquidity from central banks into the economy and the swelling of the assets price caused by this measure. Secondly, the economic depression anticipated by the Covid-19 pandemic, which should lead to more liquidity injection. This all still carries the long-term risk of the dollar losing its global store of value role. In Brazil, the increase in public spending and the increase in domestic debt should scare away investors and cause a devaluation of the real.
In this context, the bitcoin being a deflationary asset can gain traction as a store of value and asset protection. According to some pricing models, the cryptocurrency can fetch a level of US$ 80,000 to US$ 150,000 after halving.