Bitcoin has outperformed all crypto Market Cap-Weighted Indexes in January as traders turn to less risky assets amidst fear over the Federal Reserve tightening, thus the king of digital assets claims its position as crypto’s safe heaven.
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Bitcoin As a Crypto Safe Haven
The thought of Bitcoin (BTC) being a safe haven asset is quite popular, but it opposes the critics who claim BTC –and all crypto assets– is too risky, volatile, and speculative to become a safe haven. However, inside the crypto market it remains the less risky asset.
January was a very volatile month for the crypto market amidst the investors fear over The Federal Reserve (FED) hawkish moves, but an Arcane Research report shed light on how Bitcoin outperformed the other crypto indexes in the market during the bloodshed, thus maintaining its image as the less risky crypto asset to investors, especially during times of high volatility and uncertainty.
As traders take a more conservative position and look away from the most speculative assets, the Arcane report highlights how all crypto indexes saw losses between 20% and 31% this past month.
However, like the following charts show, BTC outperformed all altcoins conserving the highest crypto market cap and counting less losses. Meanwhile, the Small Cap Index fell the hardest, showing how the crypto market shifted amidst the traders’ conservatory tendency.
This gets us back to the “BTC as a crypto safe haven” belief, since the digital coin remains the least risky crypto asset to investors, who lean on it in times of turmoil.
On the other hand, the market sentiment is carefully improving “with the Fear and Greed Index now ‘only’ signaling ‘fear’ after a sustained period of ‘extreme fear’”. This could mean a better landscape for altcoins as traders’ position might turn around to the less…
