Bitcoin dips below $79,000 amid economic uncertainty

Emily Lauderdale
Bitcoin Dip
Bitcoin Dip

Bitcoin prices fell below a key psychological threshold on Monday, dipping to $79,000 in the afternoon. Although recovering some of its earlier losses, Bitcoin remains down about 15% for the year.

Despite this decline, cryptocurrency experts believe Bitcoin may hold up better than other asset classes if a global trade war persists.

Bitcoin, which is designed to exist outside the control of any central entity, contrasts with fiat currencies like the U.S. dollar or the Swiss franc, which are controlled by governments. The cryptocurrency market saw a surge in prices following the November election, with speculation fueled by pledges to cut regulation and create a strategic Bitcoin reserve. “Since the election, stocks are down and Bitcoin is up,” said Matthew Sigel, head of Digital Assets Research at VanEck, which manages $113.8 billion in assets, including several cryptocurrency funds.

“It feels to me like attempts to reorder global trade may actually be benefiting Bitcoin and other cryptocurrencies.”

Despite its origins as an alternative asset class, Bitcoin has tended to trade in the same direction as riskier stocks. As the global financial rout continues, Bitcoin has also sold off, noted Austin Campbell, a professor at New York University’s Stern School of Business. However, this trend has been tempered by the stable view of Bitcoin as a store of value similar to gold.

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Bitcoin and economic uncertainties

“History so far has shown us there is not another individual currency that people are rallying around right now,” Campbell said. “Instead, you would look to gold and Bitcoin as neutral assets, stores of value.

In Bitcoin’s case, it aspires to be the digital version of gold.”

This perspective explains Bitcoin’s volatility—moving up and down but not making significant moves in either direction, Campbell added. While Bitcoin has long had dedicated supporters, it also has detractors who question its purpose. Nevertheless, Sigel remains optimistic about Bitcoin’s future, citing continued adoption as a positive sign.

Since early 2024, exchange-traded funds have been able to hold Bitcoin directly, rather than just futures contracts tied to its price. Many large firms have also begun holding cryptocurrency on their balance sheets, reinforcing Sigel’s high conviction in Bitcoin’s continued relevance. However, Campbell pointed out potential inconsistencies in current policies.

Support for cryptocurrency, which by definition defies national borders, might conflict with goals of nationalist populism. Overall, while Bitcoin’s market behavior aligns with global financial trends, its unique attributes provide resilience amidst economic uncertainties.

Photo by; Vasilis Chatzopoulos on Unsplash

Emily is a news contributor and writer for SelfEmployed. She writes on what's going on in the business world and tips for how to get ahead.