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Bitcoin lost its allure as a safe haven asset this week.
The world’s first and most widely used cryptocurrency fell 50% over the past two days. Bitcoin – sometimes referred to as “digital gold” – fell more than 30% on Friday to its weakest level since March 2019, according to data from CoinDesk.
The cryptocurrency fell briefly below $ 4,000 on Friday after beginning the week above $ 9,000. It later recovered to around $ 5,400 at the close of US markets. Bitcoin Futures, meanwhile, was on pace for its worst week since December 2017 displacement.
The digital currency had been trading near the $ 10,000 level in mid-February. The slide started later in the month alongside global markets foraging for the rapidly spreading coronavirus.
“The recent implementation of Bitcoin prices is largely the result of the cases of coronavirus affecting global markets and driving investors toward cash security,” said Joe DiPasquale, CEO of crypto investment company BitBull Capital. “With this sharp decline, Bitcoin’s potential as a safe haven asset is called into question, but we believe it is too early to seek any correlation between Bitcoin and other asset classes.”
The nosedive bitcoin became the center of volatile trading on Wall Street this week. On Thursday, stocks saw their worst since the “Black Monday” market crash of 1987. Stocks rose sharply Friday afternoon at the prospect of fiscal stimulus from governments around the world.
Other cryptocurrencies also dropped this week. The world’s second-largest digital currency, ethereum, fell 46% this week while XRP lost nearly 40% of its value.