Compared to all other assetsIt has proven to be much easier to liquidate due to the uninterrupted market operation.
Bitcoin is often praised as a deflationary currency with a clear limit on the amount of BTC that can be in circulation. While this is undoubtedly its greatest strength, it differs from other asset classes in another aspect: it is much more fungible.
Bitcoin – the most liquid good
One of the remarkable aspects of the crypto market is that it never sleeps. This also means that it can never be closed.
With the cryptocurrency market open around the clock, Bitcoin is by far that easier to liquidate compared to everyone else. Compared to stocks, bonds, real estate and gold, none of them offer this immediacy. This also means that Bitcoin should be much more sensitive to global trends than other assets as it matures.
Bitcoin has proven to be easier to liquidate than:
• real estate
All thanks to 24/7 final settlement and 24/7 exchange trading.
Smart money learns that.
– Pierre Rochard (@pierre_rochard) March 13, 2020
Gold, which is usually touted as a hedge against uncertainty, does not have the same advantage. Instead, the gold is kept in safes that are not immediately accessible. Moving gold can also be expensive. In addition, the profit margin for trading gold can be huge, especially when a broker-dealer happens, as one user mentions.
That is very true indeed. My gold / silver bars are in the private vault, but I can’t even access them now because the vault is locked due to COVID19. Current The current buy / sell spread is also very wide. ?
– ⒿⒺⓈⒸⒽⒾⓁⒹ (@JeschildTan) April 4, 2020
Of course, 24/7 liquidity isn’t just reserved for Bitcoin. All cryptocurrencies can also be traded 24 hours a day. What is special about Bitcoin, however, is that it has by far the highest liquidity of all other digital assets.
Soon it will be twice as rare
The case of Bitcoin gets even bigger as the block reward halves in May. Analysts predict that Bitcoin will hit new highs later. Morgan Creek Partner recently thought we could see a record high in September.
However, with the worsening of the coronavirus pandemic, the future remains uncertain. The digital asset markets have been strongly correlated with the S&P 500 in the past two months, so traders need to be on the lookout for macroeconomic trends. According to analysts, we are now effectively in recession.
After halving, Bitcoin’s mining rewards are halved and much less. In the past, this has been correlated with upward momentum. After May, Bitcoin will not only be the most fungible good, but also extraordinary.
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As a leading blockchain and fintech news company, BeInCrypto always strives to comply with strict editorial guidelines and the highest journalistic standards. With this in mind, we always encourage and encourage readers to do their own research into the information contained in this article. This article is intended as news and is for informational purposes only. The topic of the article and the information provided may have an impact on the value of a digital or cryptocurrency asset, but is never intended. Likewise, the content of the article and the information contained therein do not intend and do not intend to provide sufficient information for a financial or investment decision. This article is not expressly intended as financial advice, it is not financial advice and should not be construed as financial advice. The content and information in this article have not been prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making an investment decision. The author of this article may have any amount of Bitcoin, cryptocurrencies, other digital currencies, or financial instruments at the time of writing, including but not limited to those contained in the content of this article.