Skip to content

Celsius CEO talks about why the price of Bitcoin did not explode during the Coronavirus pandemic

April 23, 2020

Alex Mashinsky, chief executive officer (CEO) of cryptocurrency lending platform Celsius Network , believes that Bitcoin ( BTC ) has not become an uncorrelated asset enough for investors to turn to in the current financial crisis.

In an April 22 interview on the David Pakman Show, Mashinsky said the cryptocurrency did not see a significant increase at the start of the pandemic because “if you take a snippet in the past year, you would see very high correlation [between BTC and] the stock market .

This correlation combined with the current crisis may be enough to deter many Bitcoin investors . While Cointelegraph has reported that Bitcoin was more correlated to gold after the March 12 collapse rather than stocks, crypto overall still has a reputation for volatility.

Celsius CEO talks about why the price of Bitcoin did not explode during the Coronavirus pandemicCelsius CEO talks about why the price of Bitcoin did not explode during the Coronavirus pandemic

“Five years ago,” Mashinsky said, “BTC seemed volatile versus stocks,” but now “it seems more stable than the stock market: it is only moving 2% per day and the stock market is moving between 5 and 10% .

Using Netflix, the best-performing stock from 2010 to 2019, as an example, Mashinsky highlighted the fact that BTC was still “2,000 times better than the world stock market champion” given the price that skyrocketed in that time period.

Oil turns negative

The CEO also cited the recent oil meltdown as part of the irony surrounding Bitcoin's volatility. The price of oil recently turned negative for the first time , while companies paid traders to take barrels out of their hands. However, this historic drop led to only a modest impact for BTC . At press time, the price remains at $ 7,000.

“Oil is the first to arrive [because of COVID-19],” Mashinsky said, “you will see that other industries are going through the same type of recycling.”

What will lead investors to Bitcoin?

The coronavirus pandemic has led to massive liquidations in many markets , including some cryptocurrency holders who need fast cash. However, Mashinsky believes that the proposed measures to stabilize the US economy. USA (Stimulus packages and other government spending) will eventually make many investors see Bitcoin as the safest bet in a tumultuous world economy .

Since there is currently more money in bonds than in stocks, the measures used can weaken the US dollar , which could cause bondholders to reevaluate their needs and turn to crypto.

“A bet on Bitcoin is a bet that deflationary pressures will win,” said Mashinsky. “When everyone is nervous, everyone goes to cash, which includes selling Bitcoin, but it's still one of the best stores of value out there.”

Receive Breaking News !

Enable Notifications    Ok No thanks