The Bitcoin admirers are still favoring the coin’s recent bearish dip and expect from the leading asset to go up resisting the current turmoil. The Co-founder and leading partner at Morgan Creek Digital, Anthony Pompliano, compares Bitcoin with Gold and says both ‘’ should do incredibly well during this time period.’’
Gold did same as Bitcoin in 2008
Pompliano points to the liquidity crisis of 2008 that caused bitcoin to plunge by 30% and claims the digital gold is also reacting similar gold. The current crisis of heavy liquidation amid Coronavirus targets both safe-haven assets- gold and bitcoin.
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‘’Bitcoin and gold are doing the same thing, just as you would expect them to in a liquidity crisis…they go down. Same thing happened to gold during liquidity crisis of 2008 too,’’ he said in a tweet.
In his recent podcast entitled Off the Chain, Pompliano gives a detailed comment on how COVID-19 leads financial activity to low and also affecting digital assets including Bitcoin. According to him, the pandemic triggers liquidity pressure resulting in the liquidity crisis.
‘’A liquidity crisis means that investors all rush to the exit doors at the same time, but there are so many more sellers than buyers that investors actually have a hard time offloading their assets for cash. Quite literally, investors begin aggressively lowering the price they are willing to accept for each asset in exchange for the cash which they are desperately seeking right now.’’
‘Holders of last resort won’t sell their Bitcoin’
Morgan Creek co-founder believes that investors who only stored BTC for cash liquidated their assets in the last week, causing price value lows in the year to date. Holders of the Bitcoin who still have digital capital in their wallets are not going to sell.
‘’Regardless of price movements in the USD exchange value, the holders of last resort won’t sell their Bitcoin. They are strong hands. They can’t be shaken out of their belief. In fact, they are likely to be buying Bitcoin on these large price drops, rather than selling. They are exchanging USD for Bitcoin right now,’’ he added.
The CEO of crypto exchange Gemini, Tyler Winklevoss, also defends Bitcoin in his recent tweet, while comparing it with Gold.
‘’If bitcoin isn’t gold 2.0, then what is it? The fact that it’s not acting how you might expect only underscores just how early it is.’’