"The world's largest cryptocurrency has seen a flood of capital into both its on-chain token, as well as spot Bitcoin ETFs which hold this key digital asset. Often viewed as "digital gold," Bitcoin has benefited from a number of long-term trends including a shift away from traditional money market funds and short-term bonds to holding some amount of liquidity in assets outside of the financial system."
"Personally, I think most of the narrative around Bitcoin being a safe haven asset is widely overblown. That's because Bitcoin's chart overlayed on top of a chart of the Nasdaq or another tech-heavy exchange is quite remarkable. The level of correlation between Bitcoin and other higher-risk equities and assorted risk assets is tremendous. Investors buying Bitcoin today are buying what I view as a leveraged speculative asset which can rise and fall faster than even the most risky equities in the stock market."
Bitcoin attracted sizable capital into its on-chain token and spot Bitcoin ETFs. Often viewed as "digital gold," Bitcoin benefited from long-term trends including a shift away from money market funds and short-term bonds toward holding liquidity outside the financial system. Investor concerns about equities and other assets coincided with Bitcoin's downside move of more than 30% from its peak. The narrative of Bitcoin as a safe haven is widely overblown given its strong correlation with tech-heavy equities such as the Nasdaq. Bitcoin operates as a leveraged speculative asset that can rise and fall faster than risky equities, and strategy unwindings and liquidations raise the risk of a repeat or worse decline than 2022.
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