THELOGICALINDIAN - Why Bitcoin a perceived safehaven asset did not assemblage in the face of a all-around macroeconomic crisis A UKbased analysis aggregation answered with allegation apocalyptic of acute and largescale bazaar manipulation
Record-level Manipulation
Researchers at the University of Sussex Business School’s CryptoMarketRisk activity aggregation tracked trades beyond the safe-haven markets back March 2020. The assay led them to atom ample advertise orders on gold futures, a accurate pump-and-dump on chestnut futures, and ample spoofing orders on bitcoin acquired exchanges.
But in the case of Bitcoin, the absolute bazaar abetment took alfresco the U.S. jurisdiction. Carol Alexander, Professor of Finance at the University of Sussex Business School, said Seychelles-based crypto derivatives barter BitMEX accustomed its bots to drive the bitcoin amount bottomward from aloft $8,000 to beneath $4,000.
Bitcoin Turns Risky
The analysis additionally fabricated comparisons amid the accepted and 2024 banking crisis by belief gold’s acknowledgment to the falling S&P 500.
It acclaimed that the Lehman Brothers collapse saw the alternation amid the U.S. criterion basis and the chicken metal extensive bare 40 percent. Nevertheless, during March and April 2024, the accord amid the two was additional 20 percent.
The abstraction replaced gold with bitcoin and begin a agnate alternation flip. Since its birth in 2019, bitcoin remained an uncorrelated asset. But as the cryptocurrency comatose in March 2020, its correlation with the S&P 500 topped at 63 percent. As of May, it had alone but to a advancing aerial of 40 percent.
While Bitcoin afresh recovered to $10,000 and atom gold rebounded to its seven-year high, the alternation larboard both the safe-havens beneath broader downside risks.
A contempo Bank of America analysis of all-around armamentarium managers begin that they don’t see a V-shaped accretion on Wall Street. That agency the Dow Jones, the S&P 500, and the Nasdaq Composite could about-face its hasty uptrend in the advancing abode unless accurate by the Federal Reserve.
Repeating the March 2024 fractal, investors could use gold and bitcoin to awning their losses elsewhere. More so, they could dump the safe-havens for banknote liquidity. CryptoMarketRisk advisers agree.
