Bitcoin could be tested this week as investors closely watch tension rising between Ukraine and Russia and the possibility of the Federal Reserve raising interest rates by 50 basis points, or 0.5 percentage points, in March.
Bitcoin, the largest cryptocurrency by market capitalization has always attracted investors and was considered a hedge against inflation. Many investors consider the digital asset as a safe haven and an alternative to gold — for storing value. However, the claims will soon be tested.
In recent months, Bitcoin has been positively correlated with equities. Amid the declaration of the Federal Reserve about raising interest rates, risky assets saw a huge sell-off. Ironically, Bitcoin — which was supposed to go trade the other way around — was heavily sold by investors. The bullish market sent Bitcoin to its six-months low.
“Bitcoin is labeled by some as a stateless currency and it has indeed performed well in the past when there were geopolitical tensions, so we could expect some demand as a safe haven asset,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank.
