[Market] Bitcoin drops intraday to the $72,000 level… debate over 'safe-haven credibility' reignited

Bitcoin extended its decline, sliding intraday to around the $72,000 level amid a global risk-off mood. In the market, skepticism is again growing over whether Bitcoin can serve as a safe-haven asset during bouts of volatility.

According to Bloomberg on the 4th (local time), Bitcoin at one point fell to $72,047, marking its lowest level in about 15 months. It is now down more than 40% from the all-time high set in October last year.

Bloomberg reported that the day’s drop was driven less by crypto-specific factors than by the risk-off stance across global financial markets. In U.S. equities, the Nasdaq 100 fell more than 2%, and selling spread across rate-sensitive sectors.

Some in the market also say waning confidence in Bitcoin is amplifying volatility. Shiliang Tang, managing partner at Monarq Asset Management, said the market is currently experiencing a crisis of confidence in Bitcoin.

Institutional flows were also choppy. U.S.-listed spot Bitcoin exchange-traded funds (ETFs) were estimated to have swung to a net outflow of about $272 million in a single day, after posting roughly $562 million in net inflows the prior session.

Bloomberg noted that Bitcoin has recently shown a high correlation with risk assets. As a result, the debate is likely to continue over whether it can function as a defensive asset during periods of market stress.