After swinging wildly for most of this year, the price of bitcoin is now back to roughly where it started 2020 – around $7,100.
And since bitcoin is priced in dollars, the flat year-to-date performance really just means it’s keeping pace with the U.S. currency, which has become one of the world’s most in-demand assets as the coronavirus prompts a flight by investors everywhere into cash.
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If bitcoin were a government-issued currency, it would be one of the world’s top performers – beating not only popular emerging-market tenders like the Mexican peso and South Africa’s rand, but also advanced-nation stalwarts like the euro, British pound and Canadian dollar.
“Bitcoin is behaving as a store of value much the same as king dollar is behaving as a store of value,” Paul Brodsky, partner at cryptocurrency and blockchain investment firm Pantera Capital, said in a phone interview.
Many cryptocurrency investors see bitcoin as a hedge against inflation, similar to gold. And many of those investors believe bitcoin will eventually benefit from the Fed’s trillions of dollars of emergency money injections, which could spur inflation over the long term.
But guess what bitcoiners can already cheer about? Beating the euro during a year that the International Monetary Fund predicts will see the world’s worst recession at least since the 1930s.
“What you would expect to see going forward are hard assets, like gold and bitcoin, outperform as fiat currencies get depreciated,” said Greg Cipolaro, co-founder of cryptocurrency analysis firm Digital Asset Research.
Think about it this way: Dollars…