- BTC has struggled in the past week alongside other markets with the ongoing tussles between Saudi Arabia and Russia amidst COVID-19 virus fears.
- The BTC has been posed to become a safe haven for investors when times are tough.
The last week has been quite awful for the stock markets and oil markets as they plummeted to all-time lows as the Bitcoin was put to test as a safe haven asset. This is amidst the COVID-19 virus and strained relationships between Saudi Arabia and Russia that has sent the oil markets to a frenzy.
Surprisingly the BTC alongside other markets also dipped breaching the $8000 mark. The market capitalization of all cryptocurrencies fell by almost $26.43 Billion proving that they were also not bulletproof. Bitcoin, arguably the biggest of them all fell by a staggering 10% as other industry leaders Ethereum, XRP, and Bitcoin Cash all posted double-digit drops. This is as international oil benchmark Brent Crude futures tanked 30% to $ 31.02 per barrel the lowest it has dipped since Feb 2016.
There is however a sense of optimism attributed to the fact that markets are showing signs of recovery and that could potentially see funds funneled back to recognized Blockchains.
Yet to be a safe haven
After the financial crisis investors are more inclined to turn to safe havens to try and reduce their market exposure. They will mostly try to liquidate their assets which causes the markets to enter into a free fall. As CEO Sino Global Capital, Mathew Graham explained that when markets fail the traders are only left with their instincts.
Some experts have come out to state that the massive crypto sell-off was made by panic-stricken investors. Founder University College London Centre for Blockchain Technologies, Tasca is however of the opinion that cryptocurrencies aren’t entirely independent as fate is intertwined with the legacy markets.
Things are however looking up as industry experts believe that cryptocurrencies may offer a safer alternative. Once things settle down it is yet to be determined whether it could be a safe haven as safe havens more often than not emerge after the crisis and not during a crisis.
Joseph Lubin, the co-founder of Ethereum and CEO of ConsenSys, has nonetheless brushed off the fluctuations in the market as he believes this is just another day in crypto. Graham also seems to share his sentiment as he believes the Bitcoin has performed rather well in hard times.
“An unhealthy result” would have been if BTC slipped below $6,000.”