The impact of global economic events on Bitcoin Until 2021 , Bitcoin and cryptocurrencies at large were considered uncorrelated with traditional assets like stocks and bonds .
“ Many research articles were dedicated to the role of Bitcoin as a hedge or a safe haven from a portfolio perspective . Given the absence of correlation , Bitcoin could be valuably used as a diversifier . However , in 2022 , the successive interest rate hikes by many central banks and the fall of FTX led to a fall in both the financial markets and cryptocurrencies . Bitcoin ’ s sharp decrease ( -70 %) was comparable to
the decrease of the NASDAQ index ,” says Finance Professor Nathalie Janson , NEOMA Business School .
Kate Leaman , Chief Market Analyst at AvaTrade , adds : “ Unlike traditional assets , Bitcoin responds to global economic events with a unique sensitivity .
“ For example , when traditional markets face uncertainty , investors might turn to gold as a ‘ safe haven ,’ which usually stabilises its price . However , Bitcoin , perceived by some as digital gold , often experiences sharp price movements under the same conditions due to its speculative nature and the diverse sentiments of its global investor base .” fintechmagazine . com 135