Will Bitcoin fall like stocks or gold? Woo wonders.
For now, bitcoin remains highly correlated with global monetary issuance.
There is uncertainty in the market about the continuity of the bullish cycle of bitcoin (BTC). But, analyst Willy Woo posits that the next big bear market will not be defined by bitcoin’s internal cycles, such as the halving, but by the global economic cycle.
According to this thesis, bitcoin, which is trading at USD 108,000 after an all-time high of USD 126,000 16 days ago, faces a new paradigm.
According to Woo, the price of bitcoin has historically been driven by the overlap of two four-year cycles: the halving of its issuance (halving) and global liquidity (M2), injected by central banks. However, consider that only the monetary liquidity cycle remains a dominant driver.
Woo warns that a future downturn in the business cyclesimilar to the crises of 2001 or 2008, will represent the ultimate test for the digital asset. In a scenario of severe economic contraction, which bitcoin has never experienced, its true nature will be defined.
The main question What Woo proposes is whether, in the face of a crisis, bitcoin will behave like a risk assetfalling in line with technology stocks, or whether it will act as a haven of valuesimilar to gold.
Meanwhile, the performance of the market’s main digital asset continues to be closely linked to the expansion of the monetary supply worldwide, awaiting an event that will test its narrative.
As CriptoNoticias has pointed out, Woo is not the only one who wonders if bitcoin is more of a refuge asset or a risk asset (similar to a technology stock). This is because the digital currency is still in its early stages of adoption. Due to its characteristics, it is very possible that the “digital gold” narrative will gain ground and popularity in the market over time.