Bitcoin suddenly became a "storm shelter" when stocks plunged

[Jessietahoang]

A paradox is that digital money - the kind of property that can be considered the world's most vicious change - becomes a stable fortress if compared to the slumps of the global stock market.
According to Bloomberg data, bitcoin rose to a one-month low from the lowest four-month lows it hit on Feb. 6 to rebound 53% to $ 9,069. Overall, the S & P 500 and Dow Jones were down more than 5 percent last week, blowing up all of their gains since the start of the year. Not only US stocks, emerging markets and money markets are also plummeting. Meanwhile, short-term US Treasuries jumped as investors fled from risky assets to find safe havens.
Immediately, bitcoin advocates have quickly praised the important feature of digital money: the asset is completely immune to the turmoil of the vast financial market, not under the constraints of any public sector, country or central bank, and therefore can become a paradise when the market collapses. And although chaos is something that can easily be found at bitcoin prices, last week US stocks have beaten the biggest currency in this respect.
The drop of 70% from the peak of nearly $ 20,000 from bitcoin has prompted many analysts to comment that the final bubble of digital money has broken. However, at least if you look at price fluctuations in the past week, it can be said that it is too early to say so.

[stompix]

Immediately, bitcoin advocates have quickly praised the important feature of digital money: the asset is completely immune to the turmoil of the vast financial market, not under the constraints of any public sector, country or central bank, and therefore can become a paradise when the market collapses. And although chaos is something that can easily be found at bitcoin prices, last week US stocks have beaten the biggest currency in this respect.

It makes no sense.
Stocks have dropped down to December levels, Bitcoin prices went down to November level.
Stocks were influenced by politics, unemployment numbers, new fiscal plans...Bitcoin went down 70% on...rumors and nothing more!!

Immune to the turmoil? One misinterpreted  letter from a CB and the coin is down 10%.
We're not close to even dream about being immune.

[jjacob]

A paradox is that digital money - the kind of property that can be considered the world's most vicious change - becomes a stable fortress if compared to the slumps of the global stock market.
According to Bloomberg data, bitcoin rose to a one-month low from the lowest four-month lows it hit on Feb. 6 to rebound 53% to $ 9,069. Overall, the S & P 500 and Dow Jones were down more than 5 percent last week, blowing up all of their gains since the start of the year. Not only US stocks, emerging markets and money markets are also plummeting. Meanwhile, short-term US Treasuries jumped as investors fled from risky assets to find safe havens.
Immediately, bitcoin advocates have quickly praised the important feature of digital money: the asset is completely immune to the turmoil of the vast financial market, not under the constraints of any public sector, country or central bank, and therefore can become a paradise when the market collapses. And although chaos is something that can easily be found at bitcoin prices, last week US stocks have beaten the biggest currency in this respect.
The drop of 70% from the peak of nearly $ 20,000 from bitcoin has prompted many analysts to comment that the final bubble of digital money has broken. However, at least if you look at price fluctuations in the past week, it can be said that it is too early to say so.

If you lose 70% of your value like Bitcoin did, then there are bound to be some bouncebacks. Citing one of these bouncebacks as proof of Bitcoin becoming a stable fortress is wishful thinking, in my opinion. You need years of data backed up by statistical analysis before anything of that sort can be claimed.

[pooya87]

it is not exactly as OP puts it but i believe that it has always been like that meaning bitcoin appreciated a little more whenever other markets were performing poorly like when Stocks market is dumping! but at the same time i always think it can also be a coincidence because bitcoin is rising overall so even when Stocks market is rising bitcoin is still rising.

and it is never a safe haven because of the high volatility of it. bitcoin is still a high risk investment. and altcoins are even worse because of their much higher level of manipulation.

[nightmanisrightman]

Also the fact that you keep alluding to Bitcoin as "digital money" clearly means you don't understand the whole scope and nature of what Bitcoin is. Digital money is the tip of the iceberg friend!

[stompix]

it is not exactly as OP puts it but i believe that it has always been like that meaning bitcoin appreciated a little more whenever other markets were performing poorly like when Stocks market is dumping! but at the same time i always think it can also be a coincidence because bitcoin is rising overall so even when Stocks market is rising bitcoin is still rising.

and it is never a safe haven because of the high volatility of it. bitcoin is still a high risk investment. and altcoins are even worse because of their much higher level of manipulation.

In the past there was this belief that most users shared, if something bad is happening to the financial markets banks or anything from the traditional system, BTC would go up.
It all started with the Cyprus crisis and many still believe that price was driven up by Cypriots buying BTC  .
Of course impossible since the banks were closed.

But there is this misconception that investors will take refuge in BTC, which as you said it makes no sense.
DJ is down 4% from the ATH, BTC is still 50%.

[littlebill16]

it is not exactly as OP puts it but i believe that it has always been like that meaning bitcoin appreciated a little more whenever other markets were performing poorly like when Stocks market is dumping! but at the same time i always think it can also be a coincidence because bitcoin is rising overall so even when Stocks market is rising bitcoin is still rising.

and it is never a safe haven because of the high volatility of it. bitcoin is still a high risk investment. and altcoins are even worse because of their much higher level of manipulation.

In the past there was this belief that most users shared, if something bad is happening to the financial markets banks or anything from the traditional system, BTC would go up.
It all started with the Cyprus crisis and many still believe that price was driven up by Cypriots buying BTC  .
Of course impossible since the banks were closed.

But there is this misconception that investors will take refuge in BTC, which as you said it makes no sense.
DJ is down 4% from the ATH, BTC is still 50%.

The logic just doesn't add up. Most of the money left the DOW because it's expected that interest rates will increase, the funds thus moved in to safer investments like government bonds. Looking at BTC as a comparative investment to the DOW nothing changed in terms of one being more favorable than the other.

[asdalani]

A paradox is that digital money - the kind of property that can be considered the world's most vicious change - becomes a stable fortress if compared to the slumps of the global stock market.
According to Bloomberg data, bitcoin rose to a one-month low from the lowest four-month lows it hit on Feb. 6 to rebound 53% to $ 9,069. Overall, the S & P 500 and Dow Jones were down more than 5 percent last week, blowing up all of their gains since the start of the year. Not only US stocks, emerging markets and money markets are also plummeting. Meanwhile, short-term US Treasuries jumped as investors fled from risky assets to find safe havens.
Immediately, bitcoin advocates have quickly praised the important feature of digital money: the asset is completely immune to the turmoil of the vast financial market, not under the constraints of any public sector, country or central bank, and therefore can become a paradise when the market collapses. And although chaos is something that can easily be found at bitcoin prices, last week US stocks have beaten the biggest currency in this respect.
The drop of 70% from the peak of nearly $ 20,000 from bitcoin has prompted many analysts to comment that the final bubble of digital money has broken. However, at least if you look at price fluctuations in the past week, it can be said that it is too early to say so.

Stock money was inside some peoples investment in Bitcoin too. Many needed to get money out because they were losing in the stock market.

[The Sceptical Chymist]

Most of the money left the DOW because it's expected that interest rates will increase, the funds thus moved in to safer investments like stocks.

This sentence makes absolutely no sense whatsoever.  This is basically like saying "Money left the Dow and was invested in the Dow".

I don't know where all that money went, but right now it's pretty obvious that investors aren't done with the stock market yet.  We had a pretty good dip and now we're recovering.  I suspect that the money that was taken off the table wasn't invested in extremely risky assets like crypto, but was converted to cash.  People take their profits when prices get sky-high.  It happens in the stock market and in crypto.  It happens in every market.  Bitcoin isn't a safe haven asset, and it's not a "storm shelter"--not by a long shot.  I get the feeling that the people who buy crypto are the ones who aren't in the stock market at all.  The ones who think the stock market is rigged or which is tied to banks or whatever.  

Digital money is the tip of the iceberg friend!

Eh, that's pretty much what the average person gets out of it and is what they think of when they think of bitcoin.

[littlebill16]

Most of the money left the DOW because it's expected that interest rates will increase, the funds thus moved in to safer investments like stocks.

This sentence makes absolutely no sense whatsoever.  This is basically like saying "Money left the Dow and was invested in the Dow".

Ha... You're absolutely right. My bad, I meant to say that the money flows in to safer investment like government bonds. I guess I was either a little too tired or a little drunk when writing that.

[Shrinath]

There is a slight discord to the opinion “the asset is completely immune to the turmoil of the vast financial market”. In the month when the US stocks, emerging markets and money markets may have hit the low, Bitcoin had sailed high. However, you will find months when the reverse logic will stand true. In such a situation what will you choose to do ? Be a hopper, hoping to invest in markets where you will always earn profit (both long term and short term). No, since there is NO market worldwide which is immune to the financial turmoil. In the US stock market the core inflation numbers have risen drastically prompting the five interest rate hikes that began in December 2015.

At this juncture Trumph administration needs to focus on how far you allow to raise interest rates to accommodate inflationary expectations. The fact that it is now with us may create a certain element of reality. However, let us wait for the FED to respond. So, we learn that both the centralized and de-centralized markets are dependent on each other to streamline the turmoil of the vast financial market.

[rehydrogenated]

This is just purely untrue. When stocks dropped bitcoin and especially altcoins dropped like a rock. The stock market dropped 4%, bitcoin dropped 40%. There are some very important takeaways from this lesson, but bitcoin being a safe haven was not one of them.

Right now bitcoin is highly correlated with the stock market when the market is falling and less correlated when the stock market is rising. When a panic hits it hits all risky assets too. One day bitcoin might be the storm shelter you dream it to be, but not yet. Sorry.

[adifariz]

Most of the money leaves the don because it is expected that interest rates will increase, the funds then go into safer investments such as government bonds. Seeing BTC as a comparative investment against don nothing has changed in terms of more profitable than others.

[littlebill16]

Most of the money leaves the don because it is expected that interest rates will increase, the funds then go into safer investments such as government bonds. Seeing BTC as a comparative investment against don nothing has changed in terms of more profitable than others.

If you're going to copy someone's post at least try and be a bit original and reword it slightly. You copied my post almost word for word except for changing DOW in to don. Good job.