His comments come after a sensational crash in the price of oil that was spurred by a lack of demand of insufficient storage.
“Last week was a really bizarre situation with oil prices moving below zero for oil futures. Nobody is traveling — no one is using gas as they’re not driving, flying, or on cruises — and oil prices were already in a bad place to begin with. While this is great for the environment, it’s not good for the oil business. Storing oil has been more expensive than the price at which it’s being sold, and hence, we saw the price crash.” Blum commented.
Coin Rivet reported on oil’s desperate descent when it plunged to $10 before suffering a capitulation low of negative $40.
The severity of the crash caused shockwaves across all global markets aside from cryptocurrencies, which actually performed well with stability and a slight charge to the upside.
“Oil has historically been one of the most reliable stores of value outside of precious metals. The price of oil has already been falling gradually, and the virus accelerated its plummet.” Blum continued.
“If Bitcoin is likened to gold, Ethereum is more like oil. If Ethereum no longer had any technical use, there would be no utility for it. Oil and Ethereum both rely on some type of utility. Like gold, Bitcoin has little intrinsic value, but its simplicity is its strength, not its weakness. Sometimes simplicity can be a good thing, especially when markets are turbulent.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.