Institutional investors looking for a safe haven amid the global spread of coronavirus are not in a hurry to turn to bitcoin. These observations were shared by The Block analysts.
Bitcoin has long been portrayed by various media and social media experts as an uncorrelated asset whose price does not follow other financial instruments, including stocks. Some experts regarded the first cryptocurrency as a safe haven, in which turbulence in traditional markets can be waited with benefits.
“The dynamics of the market last week and the disclosure of the distribution of coronavirus tested these theses”, – note analysts of the publication.
After the deepest daily decline in oil prices over the past 30 years, the Dow Jones Industrial Average index sank more than 7% at the opening of trading.
We are in a trading halt for 15 mins after 7% plunge in Dow … oh boy https://t.co/qPEHSvPnKd
– Frank Chaparro (@fintechfrank) March 9, 2020
The “barometer of the American economy” S&P 500 also fell in the first minutes of trading by 6.9%. Due to such a sharp drop, trading was suspended for 15 minutes.
The shares of oil companies fell the most in the three minutes of trading: ConocoPhillips – 26%, Chevron – 14.47%, ExxonMobil – 14.2%.
Today, March 9, Bitcoin fell below $ 8,000, pulling a wider market. The capitalization of the latter dipped by about 10%.
The chart below shows that since the beginning of February, BTC has been falling almost synchronously with the S&P 500:
At the same time, traditionally defensive assets – gold, US government bonds and the yen – are growing upwards. By the way, yields on 10-year treasury bonds on March 9 for the first time in history fell below 0.5% per annum.
OUCH! In a historic move, US 10y yields briefly crashed below 0.5%. Hit All-Time Low at 0.4655%. pic.twitter.com/AR7pVi6l9b
– Holger Zschaepitz (@Schuldensuehner) March 9, 2020
The graph below shows that the correlation of bitcoin with gold is close to zero: