{"id":114,"date":"2020-10-20T05:10:32","date_gmt":"2020-10-20T05:10:32","guid":{"rendered":"https:\/\/digitalcoinprice.com\/blog\/?p=114"},"modified":"2023-03-29T10:14:45","modified_gmt":"2023-03-29T10:14:45","slug":"crypto-markets-benefiting-government-stimulus-aid","status":"publish","type":"post","link":"https:\/\/digitalcoinprice.com\/blog\/crypto-markets-benefiting-government-stimulus-aid","title":{"rendered":"How Crypto Markets Are Benefiting From Government Stimulus Aid?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-flat ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Content<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #223c50;color:#223c50\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #223c50;color:#223c50\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/digitalcoinprice.com\/blog\/crypto-markets-benefiting-government-stimulus-aid\/#Bitcoin_%E2%80%93_Is_it_Really_a_Viable_Safe_Haven\" title=\"Bitcoin\u00a0 &#8211; Is it Really a Viable Safe Haven?\">Bitcoin\u00a0 &#8211; Is it Really a Viable Safe Haven?<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/digitalcoinprice.com\/blog\/crypto-markets-benefiting-government-stimulus-aid\/#Bitcoin_as_a_Safe_Haven_in_Action_%E2%80%93_The_US_Stimulus_Package\" title=\"Bitcoin as a Safe Haven in Action &#8211; The US Stimulus Package\">Bitcoin as a Safe Haven in Action &#8211; The US Stimulus Package<\/a><\/li><\/ul><\/nav><\/div>\n<p>How Crypto Markets Are Benefiting From Government Stimulus Aid &#8211; Historically, gold has served as the standard-bearer for safe-haven assets in the world\u2019s financial markets. This makes perfect sense, especially when you consider the predictable nature of gold and the fact that it provides investors with a secure store of wealth.<\/p>\n<p>However, investors may be somewhat surprised to note that Bitcoin is also emerging as a potential safe haven asset, with the price of the market-leading cryptocurrency and gold having <a href=\"https:\/\/news.bitcoin.com\/bitcoin-and-gold-correlation-reaches-record-high-70-bolstering-btcs-store-of-value-credentials\/#:~:text=The%20prices%20of%20bitcoin%20and,to%20data%20analytics%20firm%20Skew.&amp;text=Bitcoin%20fell%20more%20than%203.9,which%20would%20indicate%20the%20correlation.\" rel=\"nofollow noopener\" target=\"_blank\">reached a monthly correlation of 70%<\/a> as recently as August.<\/p>\n<p>This represents an all-time high, while as a principle it also explains why Bitcoin and the crypto markets could be poised to benefit from government stimulus aid and widespread quantitative easing measures.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bitcoin_%E2%80%93_Is_it_Really_a_Viable_Safe_Haven\"><\/span>Bitcoin\u00a0 &#8211; Is it Really a Viable Safe Haven?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The increased correlation between bitcoin and gold has become incredibly apparent throughout 2020, culminating in an all-time high of 70% back on August 12th.<\/p>\n<p>This trend was reinforced by the asset\u2019s respective price movements around this date, with Bitcoin falling by 3.9% to a low of $11,20 while gold slumped by 4.7% to a closing price of $1,932.<\/p>\n<p>The latter decline represented gold\u2019s biggest one-day crash in seven years, while this dual decline is indicative of a strong correlation between the two assets.<\/p>\n<p>But does this mean that Bitcoin is a viable safe haven? The answer to this question is deceptively complex, particularly when you consider the innate volatility of bitcoin and its historically wild price movements (with 2017 offering a relevant case in point).<\/p>\n<p>Conversely, the finite supply of Bitcoin helps to maintain a relatively competitive base value (similar to gold), and while this asset doesn\u2019t necessarily provide the same secure source of wealth as the precious metal, it\u2019s also largely impervious to many of the macroeconomic factors that impact on general market prices.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bitcoin_as_a_Safe_Haven_in_Action_%E2%80%93_The_US_Stimulus_Package\"><\/span>Bitcoin as a Safe Haven in Action &#8211; The US Stimulus Package<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In practical terms, the increased appeal of bitcoin as a relatively safe haven has been borne out by the stimulus negotiations in the US.<\/p>\n<p>An initial round of stimulus measures and personal cheques were issued in North America at the beginning of April, while talks about a further $2.2 trillion relief package were ongoing in the Senate.<\/p>\n<p>However, President Donald Trump has exited talks until after the US election, creating significant levels of market volatility across a range of asset classes.<\/p>\n<p>According to Edward Moya from Oanda, even Bitcoin was participating in the broader stock market selloff following Trump\u2019s revelation, as risk aversion took hold and investors sought to abandon any major positions.<\/p>\n<p>Despite this, Wall Street considers a future stimulus package to be inevitable in the US, especially with Joe Biden the strong favorite to win the US election in November. With this trend for introducing quantitative easing measures now prevalent across the globe, it\u2019s clear that the demand for Bitcoin is set to rise as the economic outlook deteriorates.<\/p>\n<p>The reason for this is simple; fiat currencies will become increasingly devalued and worthless as stimulus measures are rolled out, with central banks continuing to print money and slash base interest rates.<\/p>\n<p>As a result, investors are turning to a finite asset class that isn\u2019t centrally controlled, even if it is renowned for its incredible levels of volatility and unpredictable price movements.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How Crypto Markets Are Benefiting From Government Stimulus Aid &#8211; Historically, gold has served as the standard-bearer for safe-haven assets in the world\u2019s financial markets. This makes perfect sense, especially when you consider the predictable nature of gold and the fact that it provides investors with a secure store of wealth. However, investors may be [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":115,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,10],"tags":[],"class_list":["post-114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin","category-latest-news-updates"],"_links":{"self":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/comments?post=114"}],"version-history":[{"count":13,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/114\/revisions"}],"predecessor-version":[{"id":2411,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/114\/revisions\/2411"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media\/115"}],"wp:attachment":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media?parent=114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/categories?post=114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/tags?post=114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}