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Bitcoin's Safe Haven Status Questioned in Market Turmoil
5 Feb
Summary
- Bitcoin price dropped nearly 40% from its record high.
- The token's recent slump is linked to broader market stress.
- Investors withdrew $272 million from US-listed Bitcoin ETFs.
Skepticism is mounting regarding Bitcoin's reliability as a safe haven asset, with the cryptocurrency experiencing a significant downturn. Bitcoin has fallen nearly 40% from its record high in October, recently trading at $72,047 on Wednesday. This price represents its weakest level since November 6, 2024, shortly after Donald Trump's re-election as US president.
This latest price pressure is distinct from previous declines, as it is now linked to broader market stress affecting various assets. The Nasdaq 100, for instance, saw a decline of over 2% on Wednesday, with losses extending to rate-sensitive sectors like software and chipmakers.
Investor sentiment is further reflected in the fluctuating flows to US-listed Bitcoin exchange-traded funds. Following substantial net inflows of approximately $562 million on Monday, investors pulled $272 million from these ETFs on Tuesday. This pattern indicates a cautious approach from investors amid the current market volatility.
