Is Bitcoin becoming a safe haven?
The banking crash and the turbulent events of the last week have led to a divergence between the price dynamics of bitcoin and stocks in the stock market.
The Bitcoin safe haven narrative lost relevance during the last bear market in 2022. With the recent divergence between the largest cryptocurrency by market capitalization and US stocks, analysts believe that Bitcoin has begun to weaken, trading as a safe haven for market participants.
Will Bitcoin return as a safe haven?
As U.S. financial regulators crack down on crypto companies and institutions, and crypto-friendly banks collapse, market participants look back to simpler times when Bitcoin acted as a “safe haven,” a hedge against inflation.
The 2022 bear market and Bitcoin’s growing correlation with U.S. and tech stocks have canceled the safe haven story. After the asset’s recent bull run and Bitcoin prices hit a nine-month high above $26,000, the narrative is back.
@filbfilb twitter account analysts shared the following asset correlation chart in a tweet, noting a fairly large divergence between bitcoin price action and stocks, while this does not apply to bitcoin price action. market share.
Correlation Between Bitcoin, S&P 500 and Gold
As shown in the chart above, the largest asset by market cap split from the S&P 500 around March 13th. This week, Bitcoin is offering traders a respite from the correction in US stocks, and the safe harbor narrative is back.
Ekta Murya, FXStreet
Ekta Murya is currently pursuing an MBA in Finance. He has been working in the field of cryptocurrencies since 2017. She has held positions in the marketing team of major Indian cryptocurrency exchanges Koinex and CoinDCX. She is interested in intraday trading and the derivatives market.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
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Disclaimer: The information and opinions contained in this report are for general information only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts, CFDs and cryptocurrencies. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness and accepts no liability for any direct, indirect or consequential damages that may result from anyone relying to such information.