To The Moon

Bitcoin, the world's most popular cryptocurrency, has been a subject of intrigue and fascination since its inception.

While its volatility has raised eyebrows, one area where Bitcoin has demonstrated resilience is during economic downturns.

In this article, I will be examining Bitcoin's performance during periods of financial turbulence, highlighting its potential as a store of value and a hedge against traditional economic systems.

The total volume traded in Q2 2023. Coinbase has the highest volume.

These are the stocks that have been following Bitcoin closely and I will be sharing on how MARA have performed in Q2 2023.

$Marathon Digital Holdings Inc(MARA)$

$Hut 8 Mining Corp(HUT)$

$Coinbase Global, Inc.(COIN)$

Bitcoin: A Brief Overview

Bitcoin, created in 2009 by an anonymous individual or group known as Satoshi Nakamoto, introduced the world to a decentralized digital currency. It operates on a blockchain technology, a distributed ledger system that ensures transparency and security. Bitcoin's unique qualities, such as limited supply (capped at 21 million coins) and its decentralized nature, have made it an appealing alternative to traditional fiat currencies.

Bitcoin's Performance During Economic Downturns

1.     The Global Financial Crisis (2007-2009): During one of the most severe economic downturns in recent history, Bitcoin was still in its infancy. However, its first significant price surge occurred in 2010, with the aftermath of the crisis serving as a backdrop. Bitcoin's decentralized nature and the lack of reliance on central banks and governments attracted individuals seeking an alternative financial system. While correlation does not necessarily imply causation, the growing interest in Bitcoin during this period suggests that it was viewed as a potential hedge against traditional economic systems.

2.     European Debt Crisis (2010-2014): As the European Union grappled with debt crises and financial instability, Bitcoin gained attention as a potential safe haven asset. The decentralized nature of Bitcoin, free from government interference or central bank manipulation, appealed to individuals seeking to protect their wealth. The price of Bitcoin surged during this period, as investors flocked to the cryptocurrency as a potential hedge against the risks associated with fiat currencies.

3.     COVID-19 Pandemic (2020-2021): The outbreak of the COVID-19 pandemic led to widespread economic uncertainty and market volatility. While traditional financial markets experienced significant downturns, Bitcoin showcased its resilience by rebounding quickly from the initial shock. Institutional investors, including prominent financial institutions and corporations, began recognizing Bitcoin as a store of value and an inflation hedge. This increased institutional adoption contributed to Bitcoin's performance during this challenging period.

4.     Fed Rate Hike (2022-2023): The rate hiking exercise by Federal Reserve has taken a toil on the financial market as well as businesses. We understand that this is needed to reduce inflation. Bitcoin has show its resilience during this period as investors and hedge funds are now building up their holdings. There have popular interest and sentiment on Bitcoin or crypto related ETFs likewise. I would see more institutional investors looking to hedge on the Bitcoin.

Factors Influencing Bitcoin's Performance

1.     Store of Value: Bitcoin's limited supply and decentralized nature position it as a potential store of value. During economic downturns, when confidence in traditional fiat currencies weakens, investors seek assets that retain their value or appreciate over time. Bitcoin's scarcity and its historical tendency to exhibit positive price movements during economic crises have fueled its reputation as a store of value.

2.     Technological Advancements: Bitcoin's infrastructure and market maturity have improved significantly over the years. The development of regulated cryptocurrency exchanges, custodial services, and institutional-grade investment vehicles, such as Bitcoin futures and exchange-traded funds (ETFs), have facilitated broader participation from institutional investors. These advancements have enhanced liquidity and provided avenues for traditional investors to gain exposure to Bitcoin.

Bitcoin Rise Since March 2023

If you have been following Bitcoin prices, you would notice that BTC has been rising from Feb to Apr 23 before going for a short correction.

Then we see that it start to rise again from May to close above $30k on 02 Jul (at the time of this writing).

I will show you how MARA trade is like compared to BTC price close.

Assessment of MARA Stock With Bitcoin Rise

If we look back at how Bitcoin have been trading and the rise of MARA, it is pretty clear that MARA did encountered a correction between April and May 2023, similar to Bitcoin, but it has since risen steadily with BTC.

We know that there will always be some negative news bringing down the price of BTC. But I believe MARA strong position in Bitcoin mining would be able to stay resilient.

Summary

Bitcoin's performance during economic downturns has piqued the interest of both individuals and institutions seeking to diversify their investment portfolios.

While Bitcoin's volatility remains a point of concern, its ability to withstand and even thrive during periods of financial turbulence has garnered attention.

However, it is important to note that the cryptocurrency market is still evolving, and investing in cryptocurrencies carries risks.

But do remember that as with any investment, we should conduct thorough research and consult with financial professionals if you are not familiar with the product.

This is just a sharing from my own trading in both BTC and MARA.

Appreciate if you could share your thoughts in the comment section whether you think MARA could be invested for long term as I do see potential of Bitcoin being popularly adopted, hence the prices would soar.

@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.