Bitcoin’s late investors are familiar with its volatile price swings and plummeting valuations. Even traditional investors felt that Bitcoin is not in a “safe haven”.
Bitcoin is referred to as the “Digital Gold” because of its uneasy production and limited supply. This hasn’t been the case for investors. Bitcoin warns many times that it’s not the safe haven as it failed to stay stable in economic turmoil. In the initial days of October month, both Bitcoin and equities have taken similar swings. According to the S&P which sets the benchmark for equities shows the lowest point of $2,710 with 5.69 percent of the market loss, Bitcoin shows similar with 6.7 percent of depreciation in the records of Binance.
The technical charts of Bitcoin show the risk in its investment and it might not be a “safe haven”.
BITCOIN AND SPX
Bitcoin is not in a “safe haven”.The daily charts of S&P(SPX) and BTC have a similar correlation in Bitcoin’s notable price dip in both the markets for the previous 2 months.
SPX gains value whenever the Bitcoin does and vice versa, this entitles the status of investor sentiment worldwide. Bitcoin has peaked its value in September and faced a sudden fall at the start of October. SPX is drawn the same chart as Bitcoin.
SPX has seen a recent breakdown after its peak price. On October 4-5 its price went down by 3 candlesticks which triggered immediate sell-off. A day later Bitcoin shows a similar action in its market. SPX is providing signals for the Bitcoin market a day before or so in advance.
“NOT A SAFE HAVEN”
Bitcoin is not in a “safe haven”.Risky assets show significant price volatility is not so good economic condition and its price raises to the peak in the growing Global economy, so these kinds of assets do not offer fixed returns for the investors. Similarly, the stock market doesn’t offer for safer returns. Emerging market currencies, base metals, and oil are in the risky asset category and are the major follower of action in the stock exchange across the Globe.
BTC stated that Bitcoin has been highly volatile since its birth and there are no fixed returns in the Bitcoin market historically. It follows the stock market closely, so currently it’s being treated as one of the risk assets.
Bitcoin can be treated as “Safe Haven” if there is a significant increase in its adoption rates.