Bitcoin.org’s co-founder, who goes by the CØ₿RA moniker, has argued against bitcoin’s status as a safe-haven asset.
According to a series of tweets published April 8, CØ₿RA has called into question whether bitcoin and other cryptoassets can be considered a safe haven from the volatility of traditional markets. CØ₿RA warned against using bitcoin to hedge against the traditional financial system and called it “the biggest mistake” an investor could make in the current economy.
The biggest investment mistake you can make is to assume Bitcoin and cryptocurrencies in general are a hedge against the traditional finance system and to naively believe Bitcoin will negate your losses from recession and stock market collapse.— CØ₿RA (@CobraBitcoin) April 8, 2020
CØ₿RA explained that people view bitcoin as a risky investment and are more inclined to purchase BTC when they have extra cash. With the economic fallout and massive surge in unemployment due to the coronavirus pandemic, the Bitcoin.org co-founder anticipates a fall in demand for bitcoin.
People buy Bitcoin when they have extra cash to invest in something risky, and that's during good times, because when times are good you can afford to gamble and dream. Nobody's going to buy BTC when they've lost their job, can't afford their house, and are struggling to get by.— CØ₿RA (@CobraBitcoin) April 8, 2020
CØ₿RA went on to write the entire cryptocurrency market is sustained by “newbies” and greed-fueled investment.
The entire cryptocurrency market is sustained almost entirely by newbies jumping in blind and buying coins just because of greedy expectations of future value, value based on perception not any utility, they will dump first when shit gets real.— CØ₿RA (@CobraBitcoin) April 8, 2020
He concluded by predicting that bitcoin’s price could fall to $1K - $2K in the event of an economic depression, with most investors selling their crypto-assets to cover more essential personal costs.
If we enter into a deep depression, I wouldn't be surprised if Bitcoin was trading somewhere $1000-$2000, only the most stubborn hodlers will remain, the rest will have dumped a lot, by necessity because they will need the money for rent, food, keeping their business afloat, etc.— CØ₿RA (@CobraBitcoin) April 8, 2020
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