Is Bitcoin BTC/USD Dead As A Store Of Value? Experts Weigh In

Leading cryptocurrencies mirrored the stock market decline this week, with barometer Bitcoin BTC/USD plummeting to lows not seen since February.

Bitcoin price slid to lows not seen since February, as concerns mounted over the cryptocurrency’s narrative as a store of value.

The flagship digital asset dropped over 16% on Monday, as barometer stock indices also took a hit.

However, gold, the traditional safe-haven asset, fell a mere 1.1% during the session.

Benzinga spoke to experts about whether Bitcoin’s integration with traditional markets is closer than ever, rendering it less of an outlier.

Anyone Believing Bitcoin’s Store Of Value Theory Is Delusional

Robert R. Johnson, Professor of Finance, Heider College of Business, Creighton University, said he doesn’t see an increased coupling (between Bitcoin and stocks).

"I see Bitcoin trading as an extremely speculative supposed asset. Volatility is a part of any market, and these moves are not out of the ordinary,” said Johnson.

However, the finance professor had strong words for those arguing that the cryptocurrency is an inflation hedge or a store of value.

"Bitcoin is a nascent asset. Anyone who believed it to be either an inflation hedge or a store of value is delusional. It is an extreme-risk asset — pure and simple. The comparisons to gold are ludicrous."

Cryptos More Correlated To Each Other Than Equities

According to Chris Martin, Head of Research at Amberdata, a cryptocurrency data analytics firm that supports financial institutions like Citi, Nasdaq, and Franklin Templeton, we’re seeing a global unwinding amid several macro factors.

"Crypto’s crash is being affected far more by large liquidations. We’re seeing a sell-off in crypto en masse, and bitcoin is being hit hard, but so are other coins like Solana and BNB,” said Martin.

"If we were to look at the daily price movements for the past week, cryptocurrencies are more correlated to each other than they are to equities."

Hence, Martin believes the narrative of Bitcoin being an inflation hedge still stands.

Bitcoin’s Footprint In TradFi Expanding Rapidly

Daniel Cawrey, Chief Strategy Officer at Tonkeeper, and author of the books "Mastering Blockchain" and "Understanding Crypto," said it has become "tough" to call Bitcoin an outlier in 2024.

"We’ve seen King Crypto’s footprints expand in TradFi through exchange-traded funds, a development that’s hard to ignore,” said Cawrey.

"The high AUM and daily volumes from the top ETFs created traditional finance liquidity in the market for bitcoin – so it’s easier to hit that sell button and get a good price for BTC now than ever before."

According to Cawrey, Bitcoin is most definitely a bellwether for crypto, yet it is ultimately beholden to traditional markets now.

Perspectives hold significance, but it's crucial to remember that capital markets, especially cryptocurrencies, can experience rapid shifts.

Price Action: At the time of writing, Bitcoin was trading at $56,869.46, up 2% in the last 24 hours, according to data from Benzinga Pro.