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There has been a long standing narrative that Bitcoin can operate as a fantastic store of value that, over time, seems to always been on the increase, and at a rapid rate. The coin quickly became more functional as an investable asset than its intended purpose to be a cash system, and for that reason, sparked a speculative investment bubble. 

Bitcoin has become more of a coin that has greater utility, but primarily it is still mainly being used as a store of value as investors look to make money off its growth and appreciation in a volatile market. Rather than being cash, it is seen as gold - digital gold. 

That narrative has stayed the same, but evolved somewhat, in the past few months as there has been increased economic uncertainty across the globe. In that time, while policies have been geared towards an uptick in economic activity and a move away from saving, those still looking to make their money grow have been considering Bitcoin.

However, Christopher Inks of TexasWest Capital spoke to Cointelegraph about this narrative and explained that it is mostly still very untested. 

A global hedge

The concept that people can put their money into Bitcoin at this time and earn pretty good returns while the rest of the market goes through a patch of uncertainty certainly being paraded around. But for Inks, this has not yet been tested or proven.

“With many fundamental legacy market indicators flashing incoming recession, Bitcoin market participants are pushing the "Bitcoin is digital gold" narrative. But the truth is that we don't know if it really is yet,” said Inks

“The Bitcoin market has only been around during a bullish economy, so we don't know how it will perform during an economic downturn.” 

“We do know that Bitcoin's volatility makes it a risky asset and in a risk-off environment that normally means that it shouldn't interest people. Smart traders and investors will pay keen attention to the Bitcoin market if a recession hits and play the market accordingly. A strong Bitcoin in a recession will go a long way to supporting that digital gold narrative.”

Watching the charts

Inks also went on to explain the important role that charts and technical analysis plays in the role of the Bitcoin market where the volatility is so great that the movement can lead to psychological excitement.

“Charts are just visual representations of human interaction, and that interaction is based on the movement between fear and greed. So understanding this, traders are in a better position to read the volume and price action to decipher what is truly going on,” said Inks

“If you're waiting for the news to make a move, then you're always reacting. But being able to read that volume and price action makes you proactive as you can set positions before the news comes out so you are able to ride the movement rather than dealing with your emotions as you fight to enter after the movement has started.”

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