jueves, 4 de julio de 2019

jueves, julio 04, 2019
Has bitcoin joined the ranks of classic haven assets?

Rally coincides with a jump in the yen, Swiss franc and gold and Fed dovishness

Eva Szalay




Bitcoin is back. But it is a bumpy ride.

Since the beginning of June, prices for the cryptocurrency have rushed 50 per cent higher — a resurgence that followed a year of lacklustre trading after the price bubble at the end of 2017 popped.

So far, the rally is still a shadow of that 2017 surge, which took prices to almost $20,000. It is also unstable; prices collapsed 10 per cent in minutes on June 26, with no obvious cause. Still, at just under $12,000 on Friday, this is a hefty recovery from under $8,000 at the start of June.

The renewed gains in bitcoin reflect, in part, the vote of confidence in digital currencies delivered by Facebook’s foray into the space with the launch of Libra. From that point of view, this is simply a numbers game, with greater public participation delivering higher prices.

The rally also coincides with a jump in the price of classic haven assets, including the Japanese yen, the Swiss franc and gold. For the true believers, that is a sign that bitcoin has earned a place among the assets that gain during flights to safety.

“Bitcoin is digital gold — it’s a genuine alternative to traditional safe havens,” said David Mercer, chief executive of London-based LMAX Exchange, which operates a cryptocurrency trading facility.

Crypto fans also argue that there are macroeconomic forces at play, particularly from the shift among major central banks towards cutting interest rates. In the US, the Federal Reserve confirmed at its June meeting that rate cuts are on the cards, while the European Central Bank has also been keen to stress that it will launch another round of easing measures if economic conditions, and inflation, fail to pick up.

In response to that shift from central banks, government bond yields have collapsed, opening another opportunity for cryptocurrencies; with $13tn of government debt around the world trading with a negative yield, some speculators hunting for returns are willing to buy the market equivalent of a lottery ticket.

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