Bitcoin (BTC) Not a Store of Value, Should Not React Negatively to US Stock Crash: Eric Balchunas

Eric Balchunas, Bloomberg's senior ETF analyst, has dispelled claims that Bitcoin, as a store of value, should not react negatively to the recent US stock crash.

Recently, there have been concerns over the resilience of cryptocurrencies in the face of market crashes. In a recent analysis, Bloomberg’s senior ETF analyst Eric Balchunas dispelled claims that Bitcoin (BTC) should not react negatively to the recent US stock crash.

Concerns around the looming tariff war between major countries, like the United States, Canada, and China, are impacting the global stock market.

Particularly, the US stock market has been on the wrong side of the trade war, recording its highest daily decline in 30 months, with over $1 trillion wiped out on Monday.

While the S&P 500, Dow Jones, and Nasdaq crashed, Bitcoin followed suit. On Tuesday, the asset dumped below $80,000 for the first time since early November amid pessimistic macroeconomics and incessant outflows from US Bitcoin ETFs.

Now, as the S&P 500, Dow Jones, and Nasdaq crashed, Bitcoin followed suit. On Tuesday, the asset dumped below $80,000 for the first time since early November amid pessimistic macroeconomics and incessant outflows from US Bitcoin ETFs.

However, ETF store president Nate Geraci shared his own opinion on Bitcoin’s reaction to the US stock crash. In a recent statement, he put it best:

“Is this not Showtime for the “store of value” to be able to stand out as a hedge? If Bitcoin is the hedge that people keep saying it is, shouldn’t it be acting in that capacity now? It’s getting clobbered like a high-beta asset during this U.S. stock sell-off.”

However, Balchunas defended Bitcoin’s crash with stocks. He highlighted that its hedge was against inflation and not against stock declines. Moreover, the market expert noted that nothing has really withstood the decline, including the U.S. Treasury bonds.

It isn’t a hedge against stock declines (what really is? Even treasuries aren’t that great at this) but rather a hedge against the global money printing, no? At least that’s how I would positioned it.

As a result, he maintains that expecting Bitcoin to act as a store of value against this U.S. stock crash was a bit out of place, at least in his own view of the pioneering cryptocurrency.

Earlier this year, crypto enthusiasts began discussing whether Bitcoin could be a hedge against the stock market.

Recently, the pessimistic macro outlook pushed the U.S. stock market to its worst daily decline in 30 months on Monday. The stellar performance of the S&P 500, Dow Jones, and Nasdaq throughout the bull market has been a key talking point.

However, another aspect of the market downturn is the pessimistic macro outlook that has seen investors pull out of risky assets. This is especially pertinent in the U.S. where investors pulled $160 million from Bitcoin ETFs last week alone.

Furthermore, some enthusiasts reacted to the topic, adding that it is still too early to expect Bitcoin to act as a hedge against market trends. One user reacted:

“It’s still transitioning from a highly speculative coin to a maturing asset class. So it’s too early to expect complete protection from a relatively new investment vehicle.”

Another user added:

“People need a new paradigm shift from their current view of Bitcoin as a speculative asset to see it as a currency/store of value like gold. For it to be able to sustain that role in the long term, it’ll have to be worth at least millions per coin and become widely adopted.”