Monday’s Price Action Undermines Bitcoin’s Claim To Haven Status

Monday’s Price Action Undermines Bitcoin’s Claim To Haven Status
Andrew Rummer

over 2 years ago1 min

Mentioned in story

Monday witnessed a classic “risk off” move in markets as Chinese property developer China Evergrande’s shaky finances spooked investors and prompted a flight from stocks to safer assets. Bitcoin wasn’t among them. 

The chart above shows trading over the course of Monday and the first few hours of Tuesday. As the S&P 500 dropped the most since May, investors bought gold and US government bonds (a.k.a. Treasuries). Yet they sold bitcoin with abandon. 

Bitcoin has plenty to recommend it: a place to stash funds where governments struggle to reach, an enabler of cross-border payments, and a speculative vehicle that’s managed to surge 10-fold since the peak of COVID panic in March 2020.

Just don’t expect the OG cryptocurrency to hold its value when investors lose their nerve and want to take a little risk off the table.

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