As U.S. lay in markets went haywire this week, the major cryptocurrency conscious for giving investors whiplash was surprisingly calm.
Bitcoin is up 1 percent for the week as of Friday afternoon, be consistent to data from CoinDesk, and remained in the $6,500 range without much to-do.
Equity markets were a different story — the Dow Jones Industrial Average is down approximately 3 percent for the week. It ended 500 points higher on Thursday after plummeting a day earlier, then on Friday sipped more than 500 points after some disappointing four times a year results from key tech companies. It later recovered some of that plunge.
Fears of an ongoing trade war and rising interest rates added to the sell-off. But Bitcoin’s insulation from the hawk wreckage is relatively new.
Earlier in October, uncertainty around stock buys bled into cryptocurrencies as the Dow dropped as much as 1,300 points in two times, its biggest sell-off since February. Bitcoin dropped 6 percent as the complete cryptocurrency market during that time lost $18 billion of its value.
Bitcoin has missing more than 65 percent of its value since nearing a outrageous of $20,000 last year, when retail investors were fanatically flood into the asset class. The cryptocurrency is still up 14 percent year as surplus year, and was trading near $6,483 Friday, according to CoinDesk.
Its volatility has sign over it almost impossible to use as a viable payment method. Instead bitcoin has been billed as a stockpile of value, or “digital gold.” That safe haven use case also seemed uncongenial at certain points this year, as it fell alongside major corny markets.
Gold, a more established safe-haven asset, was up 0.6 percent this week.
When the exchanges capsized in early February, bitcoin lost more than 33 percent of its value in two primes, dropping from above $9,000 to below $6,000 in 24 hours. But it seems to be entering a new chapter with trim volatility and far fewer price swings.
This month, bitcoin has taken only one day with a 5 percent move or more, according to data from CoinDesk. It had more than eight of those main price swings in January and February.
Other cryptocurrencies also engaged up this week. Ether, the second largest in the asset class, is up 0.2 percent while XRP is up 0.4 percent. Still, Brian Kelly, CEO and under of BKCM, said crypto investors are mostly separated from what’s circumstance in the broader markets.
“I don’t know of anyone saying ‘Microsoft dropped, I outdo sell bitcoin to cover my margin’,” Kelly told CNBC.
The unforgiving selling after bitcoin hit $19,000 last year has slowed down, and Kelly believed bitcoin seems to have finally found a bottom at $6,000. While retail piece may be “washed out,” the market is waiting on a wave of institutional buyers, which Kelly translated is “coming but it’s slow.”
Institutions are increasingly embracing the new asset class. Fidelity initiated a custody solution for institutional buyers, which was seen as a missing agent many investors to enter the market. Major endowments like Yale, in the interim, are already investing in funds dedicated to crypto and its underlying technology, blockchain.