Bitcoin’s shellacking during global markets decline calls into question ‘safe haven’ theory again

Cryptocurrencies were among the hardest assets hit this morning as bitcoin slid 15% toward its worst day since June 2022. The turmoil has investors wondering, once again: what happened to the narrative that bitcoin is a store of value, and a hedge against uncertainty? Bitcoin lost as much as 17% on Monday after the broad-market sell-off intensified over the weekend. The Dow Jones Industrial Average fell as much as 1,000 points Monday following a 611-point decline Friday, while the tech-heavy Nasdaq lost as much as 6% at one point. BTC.CM= 5D mountain Bitcoin, 5 days It’s times like these when bitcoin is supposed to buck the trend. However, crypto investors and analysts have long maintained that bitcoin can be many different things at once and that in due time the current market tumult will prove a good buying opportunity. For short- and even medium-term traders it may not be, since it trades so closely with risk assets. Long-term investors, however, point out that the crypto is still outperforming the market, up about 20% this year compared to the S & P 500’s 9% gain. “Bitcoin is a hedge against uncertainty, it’s also a risk asset and it’s also a play on rates – it’s a lot of things,” Noelle Acheson, economist and writer of the “Crypto is Macro Now” newsletter, told CNBC. “That’s, in a way, why [it] tends to have a more solid floor than other risk assets like equities … because of the diversity of their narrative.” Coinbase, MicroStrategy and bitcoin miners like Marathon Digital, Riot Platforms and CleanSpark, all fell double digit percentages at one point Monday, although they all were off their lows midday. Before this weekend bitcoin was supported by a strong floor of about $55,000 and has struggled to break through its $70,000 ceiling. “Value investors will see $55,000 as a very good price to take a position, especially if bitcoin is, longer term, going to be a hedge against the building confusion in the world,” she added.