Bitcoin remains a Safe Haven for crypto investors following a difficult January

Last month, Bitcoin outperformed all crypto Market-Cap Weighted Indexes as traders convert to less risky assets amidst fear over the tightening Federal Reserve. Due to this behavior, Bitcoin has reclaimed its position as the safest crypto investment in the industry.

January was a particularly volatile month for crypto as investors were concerned with the behavior of the FED. A report by Arcane Research showed that all crypto indexes saw losses between 20-31%. While the industry suffered heavy losses as a whole, BTC outperformed altcoins as it maintained its position with the highest market capitalization.

At the moment of wiring, BTC is trading at $38,545, which marks a 0.98% increase in the last 24 hours. Furthermore, some studies believe that “Investors in the US may cautiously use bitcoin as a hedge against uncertainties.”

A 2019 study of Bitcoin found that it is a “safe haven during high and extreme periods of market turmoil for the CAD, CHF, and GBP, but fails to act as a safe haven for the other currencies.”

Following this, experts concluded in 2020 that:

“Based on the WHO COVID-19 pandemic proclamation on March 11, 2020, we test the Bitcoin and Ethereum as safe havens for stocks. Our dynamic correlations and regressions results show that Bitcoin and Ethereum, as the two major cryptocurrencies, display short-term safe-haven characteristics for stocks.”

These sentiments, however, are not universal as other researchers have had opposing conclusions.

“During the period under consideration, we find that the S&P 500 and Bitcoin move in lockstep, resulting in increased downside risk for an investor with an allocation to Bitcoin.”

Source: NewsBTC