Bitcoin kicked off the historically strong second quarter on a positive note, scoring gains overnight despite further losses on Wall Street.
The top cryptocurrency by market value rose 3.5 percent from $6,420 to $6,650, having closed Quarter 1(Q1) 2020 with a 10 percent loss, according to CoinDesk’s Bitcoin Price Index.
The cryptocurrency remained bid even as the U.S. equities began Quarter 2 (Q2) on a weak note with the S&P 500 falling 4 percent. Investors shunned risk as President Trump’s stark warning on the coronavirus pandemic raised the specter of a prolonged shutdown and deeper economic recession.
Bitcoin printing gains amid the risk-off action in traditional markets is a welcome change for observers who believe the cryptocurrency is a haven asset like gold. The cryptocurrency largely tracked the S&P 500 in March as fears of a coronavirus-led recession triggered a global dash for cash.
Sellers had an upper hand in the second quarter of 2013 and 2018, but the losses were restricted to single digits. The 161 percent rally seen in the second quarter of 2019 is the third biggest quarterly gain on record.
Many analysts are of the opinion that the massive money-printing efforts recently announced by global governments and central banks amid the Covid-19 crisis could boost bitcoin’s appeal as an inflation hedge.
And, while it’s far from certain, the mining reward halving– the programmed-in 50-percent reduction in rewards for bitcoin miners due in May – may put upward pressure on prices. “A bitcoin emission cut of 50% is a fundamentally bullish even,” said Connor Abendschein, Crypto Research Analyst at Digital Assets Data.
So bitcoin may repeat history by ending the April to June period in the green. Gains, however, may remain elusive if stock markets see another massive price sell-off, again triggering a liquidity crisis like we saw last month. In that case, investors will likely stay away from the crypto markets.