If yous've been in Bitcoin (BTC) long plenty most likely its Genesis Block has been mentioned quite a few times. If not, the paradigm below should be cocky explanatory.

Bitcoin Genesis Block RAW data. Source: UnB

Bitcoin Genesis Block RAW data. Source: UnB

It doesn't really thing if people consider Bitcoin every bit a store of value competing with gold and real estate, a medium of exchange for uncensored transactions, or a potential unit of account due to its non-inflationary model. As the digital currency supporters say, "honeybadger doesn't care" and they're right in that sense. Most likely there will never be a consensus on what Bitcoin'south chief usage is and some would argue that there is no need for one.

Bitcoin was designed to work on a standalone basis, without the need of banks, governments, international currencies or whatsoever system is needed for traditional fiat coin. Satellite and mesh network communication systems are currently in utilise in order to keep the Bitcoin blockchain alive even during an net outage. 1 does not need to imagine a catastrophic scenario in order to put Bitcoin usage to the examination as people from Due north Korea and Iran are already using it to bypass international sanctions.

How is Bitcoin a store-of-value after last week'due south 45% drib?

There are many who argue that Bitcoin cannot be a shop-of-value based on its whipsaw volatility but valuable insight tin can be fatigued from gilded's price action during the 2008 fiscal crunch.

Gold/USD daily chart 2007 - 2009. Source: TradingView

Gold/USD daily nautical chart 2007 - 2009. Source: TradingView

Gold certainly doesn't wait similar a safe haven later on a 24% plunge in less than 2 months, even more worrisome is the fact that the Due south&P 500 remained flat during that period. Therefore, is information technology really fair to clarify whatsoever correlation over such a short period? Does that sharp movement in cost invalidate aureate'due south resilience during marketplace uncertainties?

The same matter can be said as Bitcoin enters its kickoff-ever major global crunch. This, in fact, is the first of four triggers for a major price pump ahead; this is where nosotros will focus.

Resilience and lack of correlation

Bitcoin price sustaining a level above $5,000 translates into a 55% or more premium to the December 2022 low of $iii,200. Continue in mind the current crisis is something without precedent over the past decades.

The S&P 500 took merely 3 weeks to driblet 20% from its height, a signal which most investors consider the starting time of a deport market place. This is unprecedented in history fifty-fifty compared to the 1929 stock market crash.

Bitcoin and S&P 500 60-day correlation chart. Source: TradingView

Bitcoin and Southward&P 500 threescore-day correlation chart. Source: TradingView

Bitcoin's lack of correlation with stock markets is some other factor that might aid a new wave of inflow as investors realize the crisis has impacted almost every nugget class imaginable. The chart above represents the price relation between the S&P 500 and Bitcoin on a calibration from -1, a perfect changed relation to +ane, a perfect relation. The indicator clearly trends to 0 most of the time indicating in that location is absolutely no relationship betwixt the two assets.

2020 Bitcoin halving

The equivalent inflation being reduced to ane.8% per year later on the cake subsidy cut does non directly translate into price appreciation. What investors should be looking for is the sustainability of the network despite the halving'due south negative impact on every single miner. It is a $v billion industry and nevertheless there'southward nil they tin practise in order to prevent it.

The mere existence of Bitcoin Greenbacks (BCH) and Bitcoin Greenbacks SV (BSV) is a reminder that social consensus determines Bitcoin (BTC) rules, not miners, not exchanges, and certainly not the CME.

Those forks were willing to increment block capacity, hence increasing the difficulty for an average user to run a node. The simple fact of the network continuous functioning and adherence to the social consensus will be itself a brandish of force.

Will Bitcoin survive the current financial crisis?

Even though the current crisis does not seem to be mortgage credit-related, the economic turmoil caused by the Coronavirus might be enough to bring downward highly leveraged companies, concrete retail oriented businesses and credit lenders. This GDP setback could exist the trigger needed to remove confidence in the financial system as a whole.

No ane expects Bitcoin and cryptocurrencies to be the starting time option for most investors simply information technology surely is a contender for a modest percentage, equally evidenced past a Charles Schwab report published in November 2022. Recent examples of Venezuela, Turkey and Iran struggling to deal with hyperinflation of their local currencies shows that the financial crisis could lead to a perfect delinquent for increased Bitcoin adoption.

Looking frontward

Since its inception Bitcoin has been patiently waiting for a global crisis. The recent toll crash does not reflect investors' lack of confidence in Bitcoin'south network strength, digital scarcity or its ability to work as a medium of commutation.

The potential triggers for an upcoming rally come not only from its decentralized and noninflationary nature simply also from the potential crisis impact on financial institutions and the government'southward ability to sustain fiat coin credibility.

The views and opinions expressed here are solely those of the writer and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. Yous should acquit your own research when making a determination.