The post-halving price action is shaping up well, with bitcoin leading large-cap cryptocurrencies higher as it inches ever closer to the $10,000 milestone.
Though the halving itself was uneventful, it appears to have attracted some attention. Harry Potter author J.K. Rowling tweeted for help deciphering bitcoin on Saturday, and was met with a deluge of responses from cryptocurrency fans offering to guide her down the crypto rabbit hole.
Among the advisors was Tesla boss Elon Musk, who echoed Paul Tudor Jones’ investment thesis that the “massive currency issuance” of governments is making bitcoin look “solid” in comparison to fiat. This could explain bitcoin’s upswing last week, which comes as the stock market stalls and public uncertainty over inflation increases.
This Week’s Highlights
- Bitcoin Decouples From Equities
- Central Banks Flirt with Negative Rates
Bitcoin Decouples From Equities
While the U.S. and China seek to sever ties between each others’ economies, bitcoin has ended its recent correlation with the stock market. The leading cryptocurrency is now up 15% over the last seven days, but the S&P 500 has stayed relatively flat.
This sudden divergence appears to have been triggered by the halving, which could have reignited bitcoin’s safe haven appeal. Traditional safe haven gold rallied alongside bitcoin over the last few days, and is now trading at prices not seen since 2012.
Central Banks Flirt with Negative Rates
Global discussion of negative interest rates has become increasingly frantic as Trump urges the Federal Reserve to drop interest rates into negative territory.
While Federal Reserve chairman Jerome Powell is reluctant to make such a move, other central banks are more willing. In an interview with The Telegraph on Saturday, the Bank of England’s chief economist Andrew Haldane said he was considering negative interest rates “with somewhat greater immediacy” in light of the coronavirus crisis.
Many analysts suggest this unconventional monetary policy will be a boon for bitcoin — giving the cryptocurrency’s set supply limit and predictable algorithm fresh appeal, and pushing up the price as punished savers look for alternative places to park their cash.
The Week Ahead
With Bitcoin’s weekly candle closing above resistance at $9,500, bulls have been given a shot of confidence. The next milestone to pass is now $10k — a key psychological level which could create lots of volatility if successfully breached.
Meanwhile, escalating tensions with China, and uncertainty over lifting lockdowns in Europe and America, are likely to continue putting pressure on global stock markets. If equity indices do swing lower on negative news, this could create a make-or-break moment for bitcoin’s successful decoupling.