No one can deny that Bitcoin’s safe haven narrative took a big hit on March 12 after the digital asset lost more than 40% of its value within hours. However, Bitcoin was definitely not the only asset plummeting as the entire global market was getting hit at the same time due to the Coronavirus pandemic.
Willy Woo, a crypto analyst, and Twitter enthusiast has recently shared an interesting infographic about the recent crash and how BTC compares to Gold and the S&P 500.
Visualising what a 50% pull back in BTC price looks like in the bigger picture next to Gold and S&P500.
This is Bitcoin weathering the biggest crisis we’ve seen perhaps since the Great Depression… the first big test of its safe haven properties. pic.twitter.com/zG0CzKs4N9
— Willy Woo (@woonomic) April 5, 2020
The graph clearly shows Bitcoin’s drop is not as significant as the S&P 500 crash but still steeper than Gold which has been holding on pretty well. The graph, however, doesn’t show the recent performance of Bitcoin which has been able to bounce back up significantly trading at around $6,900 currently.
Correlation Between Bitcoin And Traditional Stock Market Now Broken
The recent correlation we have seen between the entire crypto market and the traditional stock market has finally been broken. Most of the traditional market has been unable to see a significant bounce after the crash and continue trading in downtrends while Bitcoin has been able to set a daily uptrend.
Bitcoin has seen an 80% price increase from the bottom and it’s still extremely bullish awaiting a breakout above $8,000 within the next few days.
Gold hasn’t been that impressive either, most traders expect gold to actually thrive in times of crisis but the precious metal also slipped, although far less. Analysts now wonder if Gold cannot see gains when the entire market goes down, what will happen when it finally recovers?
Additionally, it’s important to note that Bitcoin has seen a whopping 12,200% price increase since 2015 compared to Gold’s 60% increase.
Does this mean that Bitcoin is back as a safe haven? Not entirely. For one, a safe haven is not fail-proof, traders were forced to sell Gold and Bitcoin because of the huge losses occurring in the traditional stock market, it doesn’t matter if they are safe havens or not, people were simply forced to sell to cover losses.
What matters now is how well and fast Bitcoin can recuperate and so far it has done a wonderful job.
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