Joe Weisenthal, Bloomberg’s editor says that 2020 has been a disappointing year for bitcoin. In a newsletter, he wrote;
“It’s been a disappointing year for Bitcoin. Here are six reasons why:
- Despite the extraordinary market volatility, it hasn’t surged to new heights. In fact, it continues to make a general trend of lower highs. This takes away the argument that an economic crisis creates a boom for Bitcoin.
- Not only has it not soared, it’s basically just gone in the same direction as the S&P throughout this volatility. Bitcoin rallied at the start of the year, then plunged during the crash, then rallied during the rebound, and it has been slumping over the last few days. This undermines the argument that Bitcoin has good portfolio diversification properties.
- Bitcoin has performed roughly in line in this year with Ethereum, the next most valuable and liquid cryptocurrency. This undermines the argument that in has distinct “digital gold” characteristics that will separate it from other cryptocurrencies in a crisis.
- The Bitcoin halving (a slowing of new supply) which many Bitcoiners championed as a likely catalyst for a move higher came and went without much impact.
- The Fed has engaged in extraordinary balance sheet expansion, and governments around the world are running major deficits, and it hasn’t led to the kind of inflation or currency collapse that many Bitcoiners would have predicted. So that undermines some of the popular stories about what would catalyze a Bitcoin boom.
- Young people are discovering the stock market via platforms like Robinhood. So to the degree that people were putting money into Bitcoin because they liked volatility and action, there’s a new competitor on the block for those dollars.
The crisis may yet be good for Bitcoin, if in its wake we get infringements on privacy that create new demand for payments that can’t be blocked. But in the meantime, all that’s happened is that a bunch of popular Bitcoin narratives have been debunked.”