Moderate job growth was announced by the US Bureau of Employment Statistics, with the creation of 363,000 new jobs. Expectations and hopes for the establishment of at least 1.4 million new jobs were not met, said a Reuters dispatch, so the report on the labor market was taken as a sign of a weaker economic outlook.
This weak outlook on the economy guided to an alarming decline in the main evidence and stocks related to the traditional market, also the bitcoin market, which saw its price fall by 12% in the week. Major tech companies, including Apple, the company with the largest market capitalization, suffered important losses, not seen since March this year.
Apple and its Accumulated Losses
The chain reaction to the fall of the main technology stocks is related to the great expectation of investors in companies such as Apple, Amazon, and Google. The New York Times was aware of that early before the crash, Apple had grown more than 90% for the year; Microsoft and Facebook almost 50%, and Alphabet almost 30%. Investors’ enthusiasm to share in those gains paradoxically helped precipitate Thursday’s slide.
In the case of Apple, the accumulated losses last Thursday and Friday subtracted about 312 billion dollars from its market capitalization value. The company founded by Steve Jobs had a market capitalization of $ 2.27 trillion last Wednesday and hit a low of $ 1.96 trillion on Thursday.
Via Twitter, Willy Woo responds to trader Sven Henrich, who criticizes the thesis that defends bitcoin as a safe haven asset. Henrich simply places a comparison of the evolution of the price of bitcoin with that of the S&P 500 index (US500) and argues that bitcoin follows a regular and similar pattern.
Willy Woo claims: “This is because BTC is a combination of a risky ‘new technology’ startup, growing exponentially, with a safe haven asset. It needs to exceed a trillion dollars in market capitalization to be robust enough to be seen as a generally accepted haven. This is not very far, as it is a digital asset that grows exponentially…”.
Currencies that are between four and five years without movement show slight growth.
The correction in the price of bitcoin does not alter the fact that this cryptocurrency has parameters and metrics that support its qualification as a safe haven asset. Among these parameters are the so-called HODL Waves, presented by Coin Metrics, which show how the BTC retainers or hodlers are segmented, by the age of the coins. That is, for the period that has elapsed since they were last moved. In the Coin Metrics graph, you can see the upper band (in purple) that represents the BTC that has not moved since mid-2011. This band is decreasing and currently represents approximately 10% of the BTC in circulation. As for the group of BTC that have not moved for five years or more, there is sustained growth.
The early adopters of Bitcoin, those who benefited the most from its return on investment, seem to have decided to sell part of their BTC and spend the fiat money obtained in return. Those who acquired bitcoins for 5 years or less seem to be in favor of the option of not selling. This happens as they are realizing that the value of BTC has grown concerning the initial acquisition price, despite the fluctuations.
By: Jenson Nuñez.