Bitcoin’s price dropped down by 4.6% on Monday, stopping at last at $9,517. However, this change isn’t significant, as the crypto’s price fluctuated more strongly in the previous few months. It has skyrocketed by 32% in 2020.
It seems like the stock markets’ collapse hadn’t seriously influenced Bitcoin’s price. Crypto remained more or less steady, while the stocks and equities plummeted down. The U.S. futures suffered significant losses, S&P 500, the Dow Jones and Nasdaq falling almost to their record lows.
However, currencies such as the U.S dollar, the Japanese yen, and Swiss franc rallied due to their safe-haven status. Some experts thought that Bitcoin could also become a safe-haven, but others don’t agree with this assessment. The main argument against the idea is that cryptos don’t fluctuate due to the stock market stimulators.
Cryptocurrencies might be slower in reacting to global developments than stocks as they’re still mainly disconnected from Wall Street – stated Jeff Dorman, a chief investment officer of Arca Funds.
Dorman doesn’t expect Bitcoin to trade as a risk-on or risk-off asset. He argues that Bitcoin can’t be an actual safe-haven currency. Because gold, the Treasuries, and equities react instantaneously to global fears, but not cryptocurrencies.
The founder of the analysis firm Quantum Economics, Mati Greenspan, noted there the cryptos and stocks react very differently to the same percent losses or gains. For example, a 3% loss is severe for stocks, but it means almost nothing to Bitcoin.
Greenspan also stated that while there’s a bit of fear in the Bitcoin market, as it doesn’t compare to the panic on Wall Street, with a clear flight to safety.
Still, not all the investors argue whether Bitcoin should trade as a risky asset like stocks, or if it’s more akin to a safe haven like the U.S. Treasury bonds or gold. There is a third party that thinks crypto is neither, and it must have its category because it’s mostly uncorrelated with traditional asset prices.
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