Bitcoin Can It Survive A Black Swan - Price Collap

Today in crypto is the coronavirus a black swan event which could wreck the markets and if so, how is Bitcoin going to fare in such a situation is actually ready for such a global event. Will the Bitcoin safe, havin narrative face its toughest challenge yet? Also the Bitcoin price sees support at key lines in the sand as the market route continues can it hold. New Zealand

also proposes some new crypto tax laws and Lebanon continues to remind us just why we need Bitcoin. The crypto art this is where you subscribe for all of the latest and the hottest happening in crypto. So it has been a rough and tumble day for the price of Bitcoin. We are down nearly 7% today in around 13% so far this week. The 50 day moving average

it got crypto crushed as a line of support. We had a big wick all the way down below the 200 day moving average at least at the time of recording this video. The price has found support right around that 200 day moving average which is definitely nice to see. Also the price bounced back just above the trend line which I think really has defined the current

upward move that we have seen over the last week. But we are in a situation right now where fear has taken charge of the market. So we could indeed see some further price pain. We have a good line of support right around the $8200 level. So keep an eye out for that. But with that being said at this time we are still in an overall uptrend.

I know it seems kind of crazy. But a lot of people tend to confuse short term bearers. Price trends with long term positive price trends. Bitcoin it'll hurt you many many many times in the short term. Long term Bitcoin keeps delivering. This is why we stack sets and chill. Enjoy the discounted Bitcoin prices. The fundamentals of Bitcoin they have not magically changed overnight. Bitcoin is the

same today as it was. Last week when everybody is all super excited about Bitcoin the only thing has changed is your perception as the price has gone down. Bitcoin is the same awesomeness that it has always been. And the wise words of Douglas Adams don't panic. Stay the course my friends. This is a new super bowl cycle. It's going to be insane. Yeah. There's going to

be drawdown something going to be massive and very painful. It will happen many times on the way to a new cycle peak in 18 to 24 months. If you cannot handle the drops of Bitcoin then you do not deserve the shiqqins of Bitcoin. And the coming two years will have many sick gains for the investors who can stomach the ride. A whole new class of millionaires

is going to be made. And a whole new group of people will be out there who will have to live with years in years of deep and bitter regret because they sold at the first sign of trouble. And watch the entire crypto market moon hard core. Don't let that be you. That is of course if the coronavirus doesn't kill all of us first. So is the

coronavirus a black swan event that could tank the crypto markets? Well first what is a black swan event? It is an unpredictable event which is both very rare and which has a severe impact. Now let me just preface this talk with stating that this is a terrible tragedy. And I hope that the coronavirus is contained as soon as possible. And that the damage is as little

as it possibly can be. That being said, I want to talk about the effects of such an event on the markets because yes, these kinds of events have massive impacts for the markets. So what is interesting for me in this conversation is how do markets actually deal with a crisis to the level of something like the coronavirus and is Bitcoin really as uncorrelated as we think

it is. Look now I'm sure you know all about the coronavirus by now since it has been all over the media for the last couple of months. It is a highly contagious virus with an average death rate of around 2.3% rates do vary depending on who you're asking in which country of course with also much higher death rates for the elderly. Now due to our super

interconnected global economy, the virus is spreading very, very fast. The virus so far has hit most global economic hot spots in one way or another. We have China and South Korea and Japan and the USA and France and Germany and Italy. UK and Australia and Singapore. I mean, we're now up to nearly 50 countries. We're looking at the reality of a pandemic which could grind the

entire global economy to a near standstill. China of course being the epicenter of that virus. Now this means that China is shut down. This is massive. Currently could only grow an impact. China is the global factory. The carry on effects of China being shut down for business are incredible. Goods made in China will not be delivered or will be delayed massively. Commodity exporters like Australia will

see demand plummet because nothing's being made in the factories. Global markets will crumble like dominoes as it becomes clear that factory China is closed for business until this thing is sorted out. Now some compare what's happening right now to the SARS-R scare of 2003. China only constituted around 4% of global GDP. Today it figures it's around 17% which is massive. And of course, as virus spreads

to more and more cities and countries, those countries will then be forced to deal with their own outbreaks and will need to put their own economic activities on hold as well. It's not going to be just exclusive to China. They're going to stop the planes. They're going to stop the trains. They're going to stop the cargo. They're going to close the trains. They're going to tell

people not to come to the office. Tourism is going to be super, super hard hit. Restaurants and cafes. Even the ones that are not directly exposed to the tourist industry are going to suffer big time as people are just going to fear going out into public. And of course, the financial markets will be wrecked majorly. We have highly overexposed banks. Some of those are going to

collapse. They've been on the verge for a long time now. Anyway, only propped up by free money. And the stock markets are going to get sad. And the scope of what could happen is absolutely insane. Look, that may not happen. I hope it doesn't. But looking at the spread of the virus, we can certainly see that fear is already taking hold of the global economy. And

the thing is that the coronavirus does not even need to hit true pandemic levels to tank the global economy with fear. So with all of that being said, is the coronavirus a black swan event for Bitcoin? Personally, I don't think so. Not yet anyway. Bitcoin is the most non correlated asset out there. Let's just have a quick listen here at Anthony Pompleyano layout. Really why Bitcoin

is a good bet in times of turmoil. We'll move on to the point that I was just making now. And I think the perhaps lack of understanding about how you view crypto specifically Bitcoin relative to markets. A safe haven or a hedge doesn't necessarily have to be rising when money is going to be going to be going to be a big deal. And so the market

is going down. Yeah, I think a lot of people confuse safe haven and non correlation, right? And so a non correlated asset just means that the value drivers are different, right? You see stocks or other assets in the traditional markets are driven by GDP interest rates, etc. Bitcoin is not driven by that. Bitcoin is a artificially capped supply asset. The driven by demand and demand continues

to increase. And so over time you expect supply and demand economics to play out. So sometimes you could have Bitcoin rising when markets rise. Sometimes it could go down. It can also be negative. But what you're saying is remember what the drivers are here and the different things. Absolutely. Bitcoin over a long period of time has been a non correlated asset. And what I think is

exciting about that is when we see times of global instability geopolitical uncertainty, things like coronavirus, etc. Stocks, bonds, gold, etc. Kind of do what you expect them to do. Bitcoin doesn't do that. And so the fact that it doesn't go up is not bad. It's actually it's a non correlated asset. So it's doing exactly what it's supposed to do for your portfolio, which is exactly why

we think investors should have an independent portfolio. Gotta give it to Pompleano. He sure does lay it out well in his great representative for Bitcoin on these very mainstream sort of places. I also want to have a look at this chart here. Now it shows the degree to which markets are correlated. The higher the number, the more correlation, the lower the number, the less correlation. Bitcoin,

as you can see on this chart, is the least correlated of all assets. Now we see the usual correlations happening in times of high uncertainty. Gold goes up stocks, go down. There's no surprises there. Such a situation like a major pandemic could actually be a time for Bitcoin to shine. I want to play you this other short clip from the CEO of Virgin Galactic. In Bitcoin

specific. I still believe that today. And I think it is just a fantastic catch. So if you go back to the conversation this morning, when you see the amount of leverage the financial industry is running. And you think about all these dislocations and all these exogenous things that are happening that you can't predict. There's a lot of risk to the downside. And it would be great

that an average individual citizen of any country in the world has an uncorrelated head. Bitcoin is an incredibly important piece of any portfolio. I believe that for a long time. A lot of the biggest names in finance also believe that. But I'm preaching to the choir here when I tell you that. Most of you listening probably have much more than 1% of your portfolio into Bitcoin.

But had you read the article from this guy that he wrote back in 2013 and he had bought Bitcoin when he wrote that article, you would be up big time. You could put $1,000 in. If that was 1% of your portfolio, that would be worth $1,000. That's around $90,000 right now. So not too shabby at all. So back to that black swan question. No. Corona is

not a black swan for Bitcoin. It could be a black swan for the global markets though. But remember, Bitcoin is not correlated a significant way to those markets. So a Bitcoin may be falling in line with the stock market today. That does not mean that it will continue to do so as it's really going through its own cycles. And it has its own drivers. And it's

own reasons for demand that are outside largely of those more correlated markets. Sure, gold's up on safe haven demand. Bitcoin's not. It's down. That does not invalidate Bitcoin and how uncorrelated it is to the traditional markets. We do know that there has been correlation, of course, previously with political turmoil and hyperinflation acting as positive catalyst for Bitcoin and some isolated geographies. But that really speaks to

one of Bitcoin's core value products. Bitcoin is a store of value and is a hedge against the insanity of fiat. Now look, if this really goes into crazy, super pandemic mode and like 10% of the global population dies or the entire global economy gets completely shut down, then we can reconsider the long term impacts that this virus will have on the crypto markets. But for right

now, I don't see Corona as being a major Bitcoin factor. Okay, so that's about the coronavirus. Let's move on to a bit of lighthearted news to finish up today's news video. So New Zealand's tax authority has issued new proposals on the goods and services tax policy in regards to cryptocurrency. Before I break that down for you, can I just take a moment here to reflect on

the picture from coin telegraph. There is a koala. There is a kangaroo and there's also it looks like probably a billbe down there as well in this photo, all of which live in Australia, not New Zealand. Come on, coin telegraphs sorted out. Man, what do you do? And I tell you anyway, the inland revenue department has released a paper which includes proposals on the improvement and

simplification of tax invoice requirements and exclusion of cryptocurrencies. From specific goods and services tax provisions in particular, the inland revenue department wants to ensure that they do not create unnecessary barriers for the industry. While still early stages for this, a few of the issues being looked at are when GST will apply or not to cryptocurrency transactions. So tokens used like currency or like shares would likely

not be liable for GST, which is very, very important. Let's you buy that coffee, right? So the challenge for them is going to be that there are thousands of tokens out there and there are many different types of tokens and use cases of different currencies. So it's going to be a lot of different things to regulate. And it's not going to be easy. But the current

GST rules have left a lot of uncertainty, which has definitely slowed down industry growth here in New Zealand. And of course retail adoption is very, very low compared to our neighbors over in Australia. So you know, we've got a lot of catching up to do when it comes to retail adoption here in New Zealand. I mean, in my local city, Wellington, 400,000 people, approximately for the

wider region, there's one shop that I know that accepts Bitcoin. And it's a hair, hair place, right? So not very much retail adoption at all. And part of that is comes back to these GST requirements. No clear tax laws, retail merchants are a lot less likely to hop on board. Anyway, all of this stuff from the IRD, I see as a positive thing. I want to

see all of these. All countries, my own country, included adopt clear, sensible rules so that investors and businesses can feel confident in accepting crypto and people can feel confident in using crypto. That being said, the IRD commissioner did highlight that crypto assets are property. Crypto assets are not money as is commonly understood in particular because crypto assets are not issued by any government. They're not legal

tender anywhere. We know they're not issued by government. But I really like them. There's those central bank manipulation. Man, come on commissioner. What are you doing? Anyway, now if you want to have your voice heard on this topic. So for all the keys out there, you have until April 9th to submit your proposal. So check that out if you want to have your voice heard. And

finally for today, this trust in Lebanese banks spurs a Bitcoin boom. Now we have talked about Lebanon a few times here on the channel. Lebanon has descended into what is one of its worst economic crises that we've seen in decades. Banks have imposed informal capital control to basically force people to withdraw their savings in Lebanese pounds. But at the official exchange rate that effectively is valuing

their savings at 40% less than what those pounds are actually worth on the parallel market. Imagine that your bank has your money and will only give it to you at the official exchange rate, which means that you are basically getting 40% less than you're getting on the street. Ouch. We've seen this play out in other countries before. Venezuela being one of the many. And it keeps

happening. And on top of that kind of crazy, which is definitely crazy. For concurrency withdrawals are now limited to between 50 and just a few hundred dollars a month depending on your bank, which is again absurd beyond belief. Now in relation to the response to all of this, we've seen a strong rise in demand for Bitcoin in Lebanon. But unfortunately, it remains very hard for people

in Lebanon to actually get their hands on Bitcoin. Since there is almost no exchange service available in the country. And dollar transfers out of the country have been severely restricted. Now in this Reuters article, one of the people that they interview said the following, which I really, really liked. Bitcoin is protected by mathematics. Fiat currencies are protected by governments. Which do you trust? Smart guy, that

guy. And so very true of course. What is happening in Lebanon is but one of the many reasons why Bitcoin is so important. Bitcoin is a vote against the system. Bitcoin is an active check out of that corrupt system. Anyway, your question for today, what effect if any do you think that the coronavirus will have on Bitcoin? Do you think it's going to tank the crypto

markets or is Bitcoin going to remain non correlated? Let me know about it down below in the comment section. Thank you as always for watching today's video. I hope that you're having an awesome day wherever you are out there in the world. And if you did enjoy today's video, hit that thumbs up button. Make sure to subscribe to the channel. And if you are new around

here, long live the blockchain and peace out for next time.