In one US news segment, Bitcoin was portrayed as a better investment than US stocks.
Moderator Oliver Renick, at the end of his six-minute market round-up, claimed that investors are more interested in owning Bitcoin than stocks. Cryptocurrencies „have a lot to do“ as they are the only asset that has been bullish on the positive US economic news.
Bitcoin leaves the connection to stocks behind
The White House and Democrats in Congress came closer to reaching an agreement on the scope and details of the next coronavirus relief package. President Donald Trump said that despite opposition from his own Republican party members, he was ready to allow wider aid.
House spokeswoman Nanci Pelosi also said she was hopeful about the possibilities of a new deal.
It’s bullish news for high risk investments. So far, the prospect of a second coronavirus stimulus package has weakened the US dollar, which in turn benefited US stocks and Bitcoin . But on Wednesday, as Renick points out, the Wall Street indices slipped alongside the US dollar index.
„Bitcoin breaks higher while the stock market is unresponsive to the lower dollar and stimulus, it is the most positive thing for [cryptocurrency] since we [TD Ameritrade] started reporting on it three years ago“
Great interest in Bitcoin
Part of the mainstream media also reports that investors are not optimistic but rather uncertain about the next stimulus package. It was part of the reason the US dollar and stocks fell on the same day.
In his comments to Bloomberg, James McCormick, Global Head of Desk Strategy for NatWest Markets, stated that „there is increasing recognition that an agreement on the financial package before the elections is unlikely“. He goes on to note that investors are not focusing on the issue of a coronavirus resurgence – all eyes are on the stimulus package.
Your uncertainty is visible across the entire safe haven market. The gold hedging asset rose 0.91 percent on Wednesday due to the falling dollar sentiment, the best daily close since October 9. The precious metal proved to be an alternative to the market, which was seeking insurance against its exposure to stocks.
The correlation between Bitcoin and gold is getting stronger. Source: XAUUSD on TradingView.com
Bitcoin has been acting more like a safe haven lately in a way.
BTC rose alongside gold as investors valued its growing importance as a store of value among mainstream firms. These include Square, a multinational payments company that bought $ 50 million in BTC last week, and MicroStrategy, a publicly traded software company that replaced $ 425 billion of its cash reserves with BTC.
Investors also turned to Bitcoin after PayPal announced its foray into the cryptocurrency industry on Wednesday. The global payments giant will enable users to spend, buy, store and sell bitcoin.
Many analysts now estimate that the cryptocurrency will soar to at least $ 15,000 by the end of this year. At the time of writing, Bitcoin is trading at $ 12,948.