The Collapse of WTI Oil Prices Will Lead to an Increase in Bitcoin.
Futures for WTI crude oil fell below $ 0. While the price of bitcoin slightly adjusted to $ 6850. How will this affect the country’s economy and the cryptocurrency market?
April 20, futures contracts for May 2020 for WTI crude oil fell by more than 100%. The price reached a negative mark of $ 37.63, which has never happened before. June futures contracts for WTI until May 19 fell by almost 20% to $ 20.43 per barrel.
A sharp decline in oil production shows that the state of the global economy is precarious. Although the Dow and S&P 500 have shown significant growth over the past 3 weeks. The drop in oil futures prices is directly related to the pandemic. World oil demand declines. Everything related to the aviation industry, shipping, and building has almost stopped.
Despite the shocking collapse of futures, the June contracts for WTI and Brent remain above $ 20. Yesterday, April 20, traditional markets closed in the red. However, after a few hours, Dow and S&P 500 futures rose 0.52% and 0.58%, respectively.
How did Bitcoin react?
At the same time, the price of Bitcoin fell by 4.23% to $ 6820. With the beginning of the decline in oil prices, the Bitcoin rate fell below the support level of $ 7200. After the weekend failed to rise above $ 7277.
Below $ 7000, the price of the main cryptocurrency has taken an important support level of $ 6850. Now traders are trying to keep the price above it.
Proponents of cryptocurrencies have also begun to point to limited Bitcoin emissions. Its unique advantage in comparison with the “limitless” printing of the US dollar and the “endless” oil production.
Why will the purchasing power of Bitcoin increase?
At this stage, Bitxmi analysts believe that American investors can begin to withdraw their funds from cryptocurrency. It will put pressure on their quotations. But in the long run, by contrast, Bitcoin will go up. Now on the cryptocurrency market there are more and more large players with “huge” resources, whose trust in cash is minimal.
This will lead to future growth in the Bitcoin exchange rate. The pandemic that brought down the stock markets could be a key factor in the switch to cryptocurrencies and smart contracts, said BitXmi owner and CEO, Sanjay Jain.
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