Bitcoin may be more sensitive to developments in the yuan market this time round, with the cryptocurrency now a macro asset class this year following an increase in institutional participation.
“It’s no longer possible to analyze the crypto market without analyzing the rest of the macro markets,” Messari analysts said in their Tuesday’s newsletter. “The 2020 recession officially marks the beginning of bitcoin as a macro asset class. For retail investors and institutional investors, crypto isn’t the only asset class in their portfolio. Therefore, it’s crucial to look at crypto from a portfolio allocation perspective.”
Indeed, legendary fund managers like Paul Tudor Jones II have recently thrown their weight behind bitcoin, seeing it as a hedge against inflation.
“Bitcoin reminds me of gold when I first got into the business in 1976,” Jones said. Gold, a precious metal with limited supply, tends to gain value during bouts of fiat currency devaluation.