Bitcoin is no longer behaving as a safe-haven asset for investors looking for refuge from shrinking stock markets.

The benchmark cryptocurrency dropped by more than 15 percent this week. It established a weekly low of $9,577 on Thursday, according to data fetched by CoinStats’ cryptocurrency portfolio management app. While there was a minor jump as the session followed, it nevertheless appeared too weak to transform into a full-fledged bull ride.

bitcoin, bitcoin price
Bitcoin is losing its safe-haven status all of a sudden | Source: CoinStats’ Crypto Portfolio Management App

Ignoring Bitcoin

The US economy, meanwhile, saw investors jumping ships. They moved capital from riskier investments like equities and high-yield bonds to safe government debts, fixed-income mutual funds, and exchange-traded funds.

Investors outright ignored other perceived safe-haven assets, including bitcoin. The steep fall in the cryptocurrency’s price surprised analysts since it performed exceptionally well against the stock market dump caused by an ongoing US-China trade war.

Larry Cermak, the director of research at the Block Crypto, said today that it was dangerous to assume bitcoin as a hedge against gloomy macroeconomic scenarios.

“Why is everyone just assuming that if there is a global financial crisis or a currency war, this will translate favorably for Bitcoin,” Cermak stated. “High risk liquid assets tend to not do well in these environments. None of us know, of course but seems dangerous to just blindly assume.”

But others believed that bitcoin’s ongoing downside action was merely a correction. The cryptocurrency surged by more than 160 percent in 2019, and a 30-40 percent slippage could not impact its long-term bullish bias.

eToro’s Senior Market Analyst Mati Greenspan asserted that bitcoin was trading at premium rates in crisis-stuck economies like Argentina and Hong Kong. He added:

Bitcoin may be a risky asset for investors but for some, it is clearly a safe-haven.

What do you think? Are analysts over-reacting? Is it too early to compare bitcoin to anything? Let us know in the comment box below.

The post Bitcoin Falls Despite US Market’s De-Equitization appeared first on CoinStats Blog.

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