Bitcoin appears to be further correlated with the traditional market.
A second economic stimulus package for US citizens has been under discussion for months. Today, President Trump decided to postpone the matter until after the 2020 presidential elections. This has apparently led to a price decline for Bitcoin (BTC) and other mainstream markets.
„Nancy Pelosi asks for 2.4 trillion US dollars to bail out poorly managed, highly criminal democratic states. This money is in no way related to COVID-19,“ Trump said in a tweet on 6 October.
„We have a very generous offer of 1.6 trillion dollars. US dollar and, as usual, she is not negotiating in good faith. I reject her request and look to the future of our country“.
In subsequent tweets, the president said there would be no further BitQT talks on economic stimulus packages before the election. At the same time, he predicted his own victory in these. „Immediately after my victory, we will pass a major stimulus package that focuses on hard-working Americans and small businesses,“ he wrote.
After these tweets, the market reacted disapprovingly. Stocks fell sharply. Bitcoin fell by about $200. But it recovered and climbed to $10,600.
Bitcoin’s decline indicates that the asset is still reacting like mainstream markets, at least in terms of important economic news. For some, this behaviour contradicts the widespread belief that the asset is an uncorrelated store of value.