Bitcoin Holding Steady During Onslaught on Oil Prices as the World Runs Out of Storage

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After keeping above $7,000, Bitcoin is back again below the crucial support line. Going as low as $6,775, currently, BTC/USD is trading at $6,875.

Meanwhile, open interest on bitcoin futures is on the rise but combined with the falling prices, it isn’t in favor of an incline.

The US stock market is also trading lower with oil prices in free fall. Oil prices extended Monday’s losses today that saw the US crude futures plunging below zero into the negative territory for the first time in history.

These falling prices are the result of collapsing demand for oil in the coronavirus pandemic hit market while being overrun with the supply despite a deal by Saudi Arabia, Russia, and other nations to cut production.

“If you are a producer, your market has disappeared, and if you don’t have access to storage you are out of luck,” said Aaron Brady, vice president for energy oil market services at IHS Markit.

Bitcoin not a store of value? “I beg to differ”

After the WTO crude oil contracts plummeted, the price seems to be starting to roll over as well. Yesterday contracts expiring on Tuesday were plunging but today June futures are tumbling as well.

Unlike Bitcoin, the world is running out of places to store oil. Also, “if there wasn’t enough storage space in April, I’m not sure why anybody would think that May will be any different. Yes, eventually demand will gradually pick up again. However, until that happens, watching producers continue to pump oil out of the ground is ludicrous,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.

As such, the pain in oil markets is spilled over to stocks and the crypto market. However, the digital asset has been able to hold steady for the most part.

“For all those who’ve challenged bitcoin’s use as a store of value or the narrative that bitcoin hasn’t held its value all that well during the crisis, I beg to differ,” Greenspan added.

Interest in BTC

While the price is keeping steady, interest in BTC is surging. As we reported, Renaissance Technologies’ flagship hedge fund Medallion is entering into crypto trading.

Also, the latest data from CME reported that last month its products reached new highs in terms of unique accounts supporting the growing interest in BTC.

Moreover, in the current world of QE and where markets are manipulated by central banks, bitcoin is surely looking an attractive option, especially as analyst Ceteris Paribus said, when “investors will be looking for yield in a world with US stocks at record valuations, rates zero or negative, and commodity prices tanking.”

With the banks seizing the stimulus payment of its customers that were meant to help them to pay for their essential expenses to settle their debts further calls upon an asset like bitcoin that is unseizable.

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