"A repeat of the collapse in March is possible." What happens to Bitcoin?
The outflow of funds from risky assets has increased, according to Emerging Portfolio Fund Research (EPFR). During the past week, net outflow from equity funds amounted to about $ 7.2 billion, Kommersant writes. At the same time, $ 4.6 billion fell to developed countries, $ 2.6 billion – to developing countries. Bitcoin also belongs to risky assets, whose price for the past two months is in the range of $ 9000-10,000.
Investors are withdrawing from equity funds amid growing fears of the second wave of coronavirus pandemics. Earlier, Mikhail Shchelkanov, Head of the Microbiology Ecology Laboratory at the FEFU School of Biomedicine School of Ecology suggested that within two weeks "the wave observed in European countries" will happen in Russia. In the United States, at the end of last week, more than 40,000 new infections were registered daily (twice the average in May) and the total number exceeded 2.63 million people.
“Institutional investors exit for $ 7.2 billion is a common occurrence, the amount in the global capital market is not very outstanding, but it causes concern. Maybe it's just a profit, maybe the expectation of a case, "explained Vitaly Mankevich, president of the Russian-Asian Union of Industrialists and Entrepreneurs (RASPP).
He called the market situation controversial: NASDAQ broke the height before the crisis, the S&P 500 is approaching them, but the basic picture of the economy has deteriorated compared to January-February. There is a probability of a correction of 10-12% of bad reports for the second quarter, but the outlook for a new collapse of 30-40%, which was the case in March, is not tracked, the expert believes.
"The US $ 3 billion rocket fuel stock market goes up and breaks away from the real economy," Mankevich emphasized.
According to EPFR, more than two-thirds of the outflow ($ 5.2 billion) came from the most speculative class of funds – the ETF. Profit is also observed in oil. According to Kommersant, $ 1.5 billion was taken from oil-related funds (a week earlier the figure was twice lower).
At the same time, among growing risks, international investors invested nearly $ 20 billion in bond funds. Gold-oriented funds raised $ 2.9 billion. This led to an increase in gold prices to a maximum since 2012 of approximately $ 1,770.
“A repeat of the collapse in March is possible after the inevitability of the second wave has become apparent. There is no such evidence, but it is very likely. Therefore, if a collapse does occur, in my opinion, it will happen either in November or in January-February 2021, "predicted Garantex stockbroker Sergey Mendeleev.
In his opinion, Bitcoin will not be able to protect against the risks of the corona virus, as well as against depreciation of assets caused by the collapse of world markets. In March, after the largest stock exchanges, the cryptocurrency exchange rate also flew. In the fall, unemployment is very likely to increase, consumer purchasing power is declining and a number of industries will be almost completely killed, such as international tourism, commercial passenger transport, entertainment and so on, the expert warned.
Over the past two months, bitcoin has traded in the range of $ 9,000-10,000. Weekly cryptocurrency volatility has reached an annual minimum, Arcane Research analysts noted. Fear and greed have also fallen. There is some nervousness in the traditional market, but digital money holders are likely to expect the next step in the price of an asset.
Since the beginning of June, investors have sold 83,000 BTC more than they bought, says financial expert CEX.IO broker Alexander Yanyuk. According to him, investors are moving away from the potential risk of a fall in the value of cryptocurrencies, but it's probably not associated with fear of the second wave of coronavirus. Quotes of copper, the most important industrial metal, are actively recovering and updated in February. This suggests that investors are not waiting for production to stop because of COVID-19.
“The outflow of funds from cryptocurrency is occurring as financial assets have recently risen in price. Now at the end of six months, rebalancing portfolios. Many funds sell assets that have risen in price and buy cheaper, such as bonds. Yes, it can put pressure on the prices of digital assets, the same bitcoin. But they did well in the second quarter, says Yanyuk.
He recalled that in the US during the pandemic, household spending fell by 8% and income increased by 4%. Therefore, the expert is confident that after the advent of a new type of vaccine against coronavirus infection, people will start spending the accumulated money, inflation will start and the economy will accelerate growth sharply.