Bitcoin was meant to be an uncorrelated asset; since then, many in the crypto industry have been waiting for another financial crisis similar to 2008 to test if the top coin can test its characteristics of being uncorrelated and acting as a safe-haven asset.
However, as seen in the past month, bitcoin dropped by 50% in a few hours. At this time, many have speculated over the coin’s trajectory: many say bitcoin will eventually go down to zero, some bitcoiners have stood by the coin and reasoned as to why the coin performed as it did. Prominent crypto trader and advisor Scott Melker is the latest to comment on this.
Melker sided with the bitcoiners and opined that traders should not expect and pressurize Bitcoin to act as a safe-haven asset during an economic crisis. He asserted that Bitcoin was not born to be a hedge against market collapse; it is only supposed to act when fiat collapses and there’s hyperinflation. He stated,
“Bitcoin’s price is moved by a few whales who make sudden decisions at any given time. As the narrative goes some whales needed to cover losses in other markets, and the top hedge funds institutions sold their BTCs and this resulted in the price fall. But I really don’t think BTC should be expected to act as a safe-haven during this time.”
Another point in question here is the coin’s digital gold narrative. BTC is portrayed as the digital version of gold and the Kingcoin has actually stood by this narrative.
BlockFi’s cofounder Flori Marque and many other prominent crypto contributors have opined that for BTC to do well in the near future it has to stop being correlated with equity markets. But as noticed, the BTC-GLD correlation which was on a decline has started increasing.
Source: BTC-GLD correlation chart, coinmetrics
