Bitcoin is losing its luster as a safe-haven asset amid the coronavirus-induced market rout.
The world’s largest cryptocurrency tumbled another 32% early Friday, falling to $3,915. That brings its total losses in the last two days to 50% – one of the largest drops on record for the digital coin. Bitcoin pared losses after the epic drop, Business Insider reported.
The Bloomberg Galaxy Crypto Index fell as much as 49%, hitting a historic low. Other coins such as Ripple and Ethereum whiplashed, falling and then regaining some losses.
Investors are liquidating alternative assets such as Gold and Cryptocurrency to meet market obligations and build cash-reserves, a similar theme to that which occurred during the last financial crisis,” Matthew Dibb, co-founder, and chief operating officer of Stack, told Business Insider in an email.
According to Business Insider, his expectation is that a further sell-off “will likely lead to the additional downside in the cryptocurrency market and lower liquidity for spot trading and derivatives instruments.”
At the same time, safe-haven assets slumped as investors sold them off to boost cash. Gold, which usually rallies when stocks decline, fell on Thursday before trimming losses Friday. The yield on the 10-year US Treasury bond advanced Friday as investors sold the safe-haven asset – yields move inverse to price.