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Babbitt Information (ID: bitcoin8btc)
Since Bitcoin had been relatively stable prior to this drop, some analysts reported that Bitcoin volatility had hit record lows, which is a sign of a maturing market. On October 8, Bloomberg strategy analyst Mike McGlone said that as the cryptocurrency market matures, volatility should continue to decline when talking about the decline in cryptocurrency trading volume.
secondary titleHowever, after weeks of stability, the price of Bitcoin dropped suddenly, shaving 5% off almost instantly. Prior to this, according to data, Bitcoin’s volatility in September hit a new low in the past 17 months. That period of stability appears to be over, though, with the digital asset suffering a massive price shock that lost roughly $13 billion in market value in minutes, according to CoinDesk.
U.S. stocks plummet, gold rises, bitcoin, seen as a safe-haven asset, falls
On October 10, US time, the three major US stock indexes collectively plummeted. First, the Dow fell 831.83 points, the third-largest drop in history.
The SP 500 not only fell 3.29% in one day, but also fell for 5 consecutive days. This is also the longest losing streak for the index since Trump was elected.
The Nasdaqs 4.08 percent drop for the day was the biggest since June 2016.
At the same time, the subsequent Asia-Pacific stock markets also plummeted along with the U.S. stocks, and the scene was more heroic than the U.S. stocks.
The plunge in U.S. stocks triggered panic in the market and stimulated the outbreak of risk aversion in the market. The price of gold responded and rushed to the $1,190 mark again, approaching $1,200.
Bitcoin is also known as digital gold. Bitcoin has all the attributes of money, but also has some unique features that make it a viable safe-haven investment option. Many investors see Bitcoin as a safe-haven asset that can rival or even replace gold.
Earlier, some netizens released a trend chart of gold and bitcoin, and the trends of the two were surprisingly similar.
However, in this global stock market crash, Bitcoins safe-haven function does not seem to be well reflected.
In fact, although traditional markets such as the stock market and legal currency have little relevance to the Bitcoin market, there are still many factors that affect Bitcoin.
Brief fluctuations in bitcoin’s price are often attributed to trading “bots,” the launch of which is often thought to have a domino effect on the price.
Additionally, so-called whales (holders of large amounts of cryptocurrencies) cause price volatility because they buy and sell in such large quantities that they affect prices across the market.
Meanwhile, the International Monetary Fund (IMF) recently issued a new warning about the rapid growth of digital currencies and the potential threat to the economy.
The IMF stated in the report:
Cybersecurity breaches and cyber-attacks against critical financial infrastructure are an additional source of risk, as they can disrupt cross-border payment systems and disrupt the flow of goods and services. And the continued rapid growth of web-based encrypted assets may create new loopholes in the international financial system.
