As the international trade situation tightens and global central banks cut interest rates, traditional safe-haven assets and the bitcoin market are already crowded with safe-haven people. In particular, Bitcoin has risen in 20 categories of assets since May, with a cumulative return of 104.8%.
On August 9th, the global digital money management grayscale investment (Grayscale Investments) released a research report that the global liquidity crisis brought by trade friction opened the curtain of currency depreciation; the value storage potential and expenditure characteristics of Bitcoin And the growth potential of new technologies is enough to make the original cryptocurrency a unique asset.
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Since the trade friction escalation in May, the cumulative return rate of Bitcoin has been 104.8% (as of August 7), and it has easily outperformed traditional safe-haven assets; the average return rate of the other 20 asset classes except Bitcoin is only -0.5%. .
What is the biggest risk in the world today? Liquidity crisis brought about by trade friction
In the past 60 years, financial crises have often caused enormous damage to the global economy. Grayscale cited Goldman Sachs' data in the report that the number of major global stock markets has plummeted over the past 60 years, and the scope is growing. Global debt is currently at an all-time high of $250 trillion, accounting for more than 300% of global GDP.
The 2019, which is not shown in the picture, is currently very pessimistic in the context of the escalation of international trade friction.
Taking this week as an example, the European and American stock markets fell sharply on Monday trading day. The European Stoxx 600 index fell 4.7% in two days, the biggest two-day decline since June 2016, and closed below the 200-day moving average. The three major US stock indexes hit the biggest one-day drop this year, the S&P fell nearly 3%, the Dow fell more than 760 points, the intraday decline was close to 1000 points, the Nasdaq fell more than 3% and fell for six days.
What is the biggest risk in the world today? The answer given by the gray scale is: the liquidity crisis brought about by the trade war. On Monday, the renminbi broke across the shore on the 7th. On Tuesday, New Zealand, India and Thailand cut interest rates within one day. The former countries cut interest rates more than expected. The trade war has become a currency financial war, and the currency depreciation in the era of currency liquidity crisis has become a reality.
Bitcoin gains lead the traditional safe-haven assets
In the troubled times, is there any good way to hedge the risk? Grayscale believes that under the concept of diversified portfolios, it is time to allocate more Bitcoin assets. There are three reasons:
(1) Bitcoin is as scarce as gold,
(2) Bitcoin can also be used in daily life like cash.
(3) Bitcoin can enjoy the benefits of blockchain technology for a long time.
Why buy Bitcoin now? Because it has the potential to perform well during the “normal economic cycle” and “liquidity crisis”, especially during the period of currency depreciation;
As Bitcoin continues to be adopted, it represents a transparent, immutable, global form of liquidity that provides wealth preservation and growth opportunities. Grayscale also said that since the trade war escalated on May 5, the consumption and economy of the two countries have been affected, and global liquidity has also contracted. The cumulative return on Bitcoin was 104.8% (as of August 7); in comparison, the average return for the other 20 asset classes was only -0.5% over the same period. Among them, the traditional safe-haven assets gold, bonds, Japanese yen and Swiss francs were among the top gainers, while the RMB was depreciated by 4.6%. The MSCI Emerging Markets Index was the worst performer, with a decline of 10.2%.
It is worth mentioning that grayscale is one of the famous bitcoin whales. Most of its capital inflows are concentrated on Bitcoin investment trusts and hold about 200,000 bitcoins. On August 2, the grayscale announced its cryptographic trust fund data, the size of the Bitcoin trust reached 2.409 billion US dollars, and the two larger trusts were ETH's 48.7 million US dollars and ETC's 33.7 million US dollars.
Source: Shallot blockchain