Although we say that bitcoin is digital gold, its recent behaviour has show crypto users that it does not always act as a safe haven during geopolitical crises, or at least not immediately like gold or silver for:
- Risk Activation:
When there is uncertainity, many investors reduce their exposure to volatile assets such as cryptocurrencies
- Continous Liquidity
Unlike other stocks and bonds, cryptocurencies do not close on weekends, allowing for quick liquidation in response to news.
- High Leverage:
Many leveraged futures positions are liquidated during sudden drops
This type of action taken by the market is merely a reaction to shortterm panic, smart crypto users can view it as a cleansing where weak positions are falling.
Stay Alert!