Turns out crypto is not the “digital gold” many claimed May 10, 2022
“‘It is now clear that bitcoin trades parallel to the risk assets, rather than [as] a safe haven,’ said Ipek Ozkardeskaya, an analyst with Swiss bank Swissquote, in a report in April. ‘bitcoin is still not the digital gold, it’s more of a crypto-proxy for Nasdaq, apparently.’”
“Cryptocurrencies are sometimes hailed as digital gold, a so-called safe haven asset that can serve as a hedge against more volatile investments, like stocks. But it’s hardly the case in the market rout we are seeing now. It turns out, when fear of economic uncertainty is real, crypto is not nearly a good hedge as actual gold or even government-backed currencies.
On May 9, when major stock indexes logged their worst single-day losses since early 2020 (S&P 500 fell 3.2 percent and Nasdaq down 4.3 percent), cryptocurrencies dropped even farther, with bitcoin and ethereum both down nearly 10 percent.”
“Since peaking at $69,000 in November 2021, bitcoin has lost half its dollar value and moved in the same downward direction as stocks amid surging inflation, rising interest rates, and geopolitical uncertainties stemming from Russia and China.
Gold and other precious metals prove to be much better hedges in times like this. While bitcoin is down 34 percent and the in 2022 so far, gold has held steady around $1,800 per ounce. Wells Fargo analysts predict gold could reach as high as $2,100 per ounce this year.”
https://observer.com/2022/05/bitcoin-cryptocurrency-not-safe-haven-asset/