Between the 12th and 13th of April, Bitcoin (BTC) prices dropped a significant 13.3%, triggering leveraged traders to sell off their holdings. The ensuing market turmoil led to approximately $500 million in forced sales and a decrease of around $5.4 billion in outstanding contracts.
Despite the price of Bitcoin bouncing back up to $62,600, some experts dismiss this as mere market volatility. However, other analysts argue that the recent price drops undermine Bitcoin’s reputation as a safe-haven asset even further, particularly when compared to gold’s stability during geopolitical crises such as war.
Gold may be unpredictable in terms of its price fluctuations, but it has consistently demonstrated value as a reliable asset for preserving wealth. Currently priced at $2,350, gold reached a peak of $2,432 on April 12, setting a new record high.
Gold prices surged based on speculation about an impending Iran attack, but then dropped once Iran denied any intentions of attacking and closed lower on Friday. However, Iran carried out the attack over the weekend, and since cryptocurrencies like bitcoin are constantly traded, 24/7, the market didn’t consider it a safe-haven asset during such geopolitical events.
— Tom Linn (@TomLinn14) April 14, 2024
According to Tom Linn’s report, gold remains a preferred choice over Bitcoin due to its historical value appreciation during conflict periods, unlike Bitcoin which has yet to demonstrate such growth.
It is also possible to contend that large investors are responsible for the majority of transactions in Bitcoin options and futures contracts, as indicated by the significant cost increase of these derivatives, which exceeded 10% annually. This surge suggests that many people believed Bitcoin presented lucrative opportunities.
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2024-04-16 02:28