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Mike Novogratz Explains Why Bitcoin (BTC) Is Failing as Safe Haven

Sun, 03/01/2020 - 17:58
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Alex Dovbnya
Crypto boss Mike Novogratz explains that Bitcoin failed to act as a safe haven asset because of mass liquidations of both risk-on and risk-off assets
Mike Novogratz Explains Why Bitcoin (BTC) Is Failing as Safe Haven
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Galaxy Digital CEO Mike Novogratz has attempted to explain what exactly happened to Bitcoin's safe haven status. In his new tweet, he writes that investors tend to 'take leverage down' and book profits during such black swan events.

Bitcoin (BTC) Bull Mike Novogratz Says That He Would Short All Altcoins

Not a hedge asset 

From the U.S. stock market suffering from its quickest correction since the Great Depression to oil prices plummeting 16 percent — this week will surely go down in history.

When global markets got gripped by a ruthless sell-off, Bitcoin failed to serve as a store of value, which many believe should be its main use case. In fact, BTC performed worse than any traditional asset, shedding 15 percent of its value in less than a week. At press time, it is just trading just below its key support level of $8,500


Bonds, not Bitcoin

While gold bugs were quick to dismiss Bitcoin's as a hedge against economic uncertainty, Novogtatz's claim about investors booking profit definitely holds water.

One of the biggest surprises of this tumultuous week was the gold price recording a five percent drop on Friday. The yellow metal is considered to be the most robust store of value. 

Just like during the 2008 crisis, investors started liquidating both stocks and gold for covering their margin calls. Bonds and cash turned out to be the real safe haven.  

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at