Bitcoin (BTC) was lower for a second day, slipping below $18,000 to the lowest in almost two weeks.
“The momentum that characterized bitcoin throughout October and November seems to have cooled down,” Matt Blom, head of sales and trading for the cryptocurrency-focused financial firm Diginex, told clients Friday in a note. “Prices retrace even in light of positive news.”
In traditional markets, European shares fell as Germany reported record virus cases and deaths, and U.S. stock futures pointed to a lower open amid fading optimism over stimulus talks in Washington. Gold weakened 0.1% to $1,834 an ounce.
If everyone says bitcoin is a hedge against central bank money printing, does that make it a hedge against central bank money printing?
It looks that way. Or at least that’s one interpretation of recent news developments and market signals.
Government-issued currencies like U.S. dollars are accepted as a form of payment because the government decrees they be so. Such tenders are often referred to as “fiat” currencies, from the Latin “It shall be.”
Bitcoin was invented 11 years ago as a new form of electronic peer-to-peer payment built atop a blockchain network that no single government, company or person would control. But it’s the limits on the cryptocurrency’s supply, hard-coded into the underlying network programming, that have garnered so much attention recently from big investors: Only 21 million bitcoin can ever be created, a true stumper for monetary economists or analysts accustomed to the supply and demand calculations typically applied to commodity markets from gold to oil to cocoa to pork bellies.
As governments and affiliated central banks have created trillions of dollars of fresh money this year to combat the steep economic toll of the coronavirus, more big institutional investors are deciding that bitcoin will hold its value as fiat currencies become ever more abundant.
Take the latest announcement from…