Dow Jones and Bitcoin seem to have something in common, and that is both falling in prices at the same time. Dow Jones, for instance, has dumped significantly within the past 48 hours. It recorded a percentage decline not seen since October 2008. The same downtrend is evident in the Bitcoin market with the asset revisiting a price zone it traded at in January 2020. Nonetheless, Bitcoin is a better investment than the Dow Jones for a good number of reasons.
Dow Jones Industrial Average Dumps by 7%
Dow Jones Industrial Average (DJIA) declined by 2,000 points and specifically, 7.79% on March 9, 2020. The decline shook the financial markets given that a dump of this nature was last witnessed in October 2008, where the Dow tanked by 7.87%. On the other hand, the decline was tied to the fears that the coronavirus epidemic might trigger an economic recession across the world.
Also, the Suadi Arabia oil price war with Russia caused a massive sell-off in the stock market. And the U.S stock market was closed on Monday to be reopened hours later on Tuesday. The latter was in a bid to save what’s left of the market and prevent further sell-offs.
Bitcoin Declines by 15%
Bitcoin, on the other hand, also took a beating on Monday. The crypto asset declined by 15% within 48 hours but is currently retracing from its downtrend. Nonetheless, comparing Dow Jones with Bitcoin shows that the top cryptocurrency is a better investment of the duo. It is a decentralized payment system that is neither controlled by governments nor a centralized entity. As such, its value cannot be manipulated easily.
Many expect the US central bank, the Fed to print more dollars in a bid to curb the inflation rate. Contrastingly, Bitcoin cannot be minted in excess since it has a fixed supply. Moreover, the daily reward to miners for each block mined is fixed, which helps to control the number of coins in circulation at a time.
Bitcoin as a Safe Haven Against Coronavirus
Amidst fears of coronavirus spreads and the potential for the economy to go into financial crisis, investors can convert their assets to Bitcoin. The latter will ensure that even if fiat devalues significantly, a greater percentage of their earnings is saved. Further, market traders looking to profit this season can fall back on the crypto market to trade.
According to Kim Dotcom, founder of MegaUpload:
“Prepare for the worst economic crash since the Great Depression. Sell stocks and fiat currencies while they still have some value. Buy Crypto and Gold. Do it now. Trust me. This is not a drill.”
Featured image credit: bitcoinexchangeguide.