Is Bitcoin a safer investment compared to the United States dollar? This is the question Marcel Pechman, an analyst and writer, tries to answer in the latest episode of “The Market Report” on Cointelegraph Markets & Research YouTube channel. Pechman refers to a Bloomberg Markets survey that shows Bitcoin is one of the top three assets investors would pick in the event of a U.S. debt default, which could be in the cards with the risk of the U.S. government defaulting on debt. According to the analyst, Bitcoin trumping fiat currencies as a preferred asset is not surprising, as central banks from eurozone countries, Japan, Canada, England, and Switzerland boosted their borrowing programs from the U.S. Federal Reserve in March 2023. Fiat currencies have high correlation to the U.S. dollar, making them vulnerable in case of a U.S. debt default, putting Bitcoin in a safer position.
However, Pechman predicts that gold would still be a more preferred asset, with 10x higher allocations compared to Bitcoin, due to the cryptocurrency’s lower market capitalization and high volatility. Nonetheless, a government shutdown could cause 11% of retail investors to add Bitcoin to their portfolio as a safe investment, compared to 46% for gold. Pechman does not provide spoilers on the odds of Bitcoin breaching the $100,000 mark in the event of a government shutdown, so viewers can watch the show to find out.
Moving on to Bitcoin’s resistance level, Pechman believes that Bitcoin’s $28,000 resistance will not be a walk in the park. The recent correction that brought the price down to $25,800 was probably caused by high transaction fees. However, Pechman argues that the network worked as it was intended, with high fees acting as a defense against spamming. The main problem holding back a recovery above $28,000 is professional traders’ positioning using derivatives, as whales and market makers were already neutral-to-bearish ahead of the event.
Finally, Pechman discusses the failed crypto lending platform Celsius’ $780 million Ether movement from the Lido staking platform, and how it could ultimately impact Celsius creditors. He also covers what is happening between Celsius, Ethereum, and Lido staking.
To conclude, the show does not provide investment advice or recommendations, and readers should conduct their own research when making investment decisions. The views and opinions expressed in the show are solely those of the analysts and do not necessarily reflect the views and opinions of Cointelegraph. The Market Report is available exclusively on Cointelegraph Markets & Research YouTube channel.