Byrne Hobart, a CoinDesk columnist, is an investor, consultant and writer in New York. His newsletter, The Diff (diff.substack.com) covers inflection points in finance and technology.
Bitcoin was designed for many reasons, but one of the most important was to be a safe-haven asset during times of financial distress. From the genesis block’s coinbase parameter (“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”) to today, bitcoin’s fans have treated it as something worth owning when the market goes crazy.
So it’s disappointing, to say the least that, after the fastest market route in recent history, an asset built to be a safe-haven… dropped 31 percent while the S&P dropped by a quarter. The daily correlation between the S&P and bitcoin went from slightly negative in February to .6 in March. Bitcoin barely responded to the Fed cutting rates to zero, and shrugged off other monetary interventions.
This is painful to anyone who owns Bitcoin, especially to anyone who bought it as a hedge against exactly this kind of sell-off, and exactly this kind of central bank response. The money printer went brrr, and yet the store-of-value lost value.
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Author: Byrne Hobart