Bitcoin’s Safe-Haven Appeal Grows Amid Profit-Taking and Market Uncertainty
Bitcoin has gained increasing attention as a safe-haven asset this week, showing resilience despite volatility in U.S. equities and bond yields, which were affected by the ongoing tariff disputes between the U.S. and China.
On Thursday, major cryptocurrencies experienced a dip, with some tokens falling by up to 5% as traders took profits from the strong gains seen earlier in the week. Dogecoin (DOGE) led the losses among the largest assets, while Bitcoin (BTC) managed to hold steady around the $93,000 mark. Other major tokens such as XRP, Solana (SOL), BNB Chain’s BNB, and DOGE saw losses of over 2%, while Ether (ETH) fared slightly better, with a 1.5% drop.
The overall cryptocurrency market cap saw a decline of 2.5%, and the CoinDesk 20, which tracks the top 20 cryptocurrencies by market capitalization, lost more than 3% of its value.
In a positive sign for Bitcoin, U.S. spot Bitcoin exchange-traded funds (ETFs) recorded over $916 million in inflows on Wednesday. Many traders attribute this surge to Bitcoin’s growing reputation as a safe-haven asset, particularly as the U.S. dollar index weakens and volatility in the equity markets persists.
Vugar Usi Zade, COO at Bitget, explained the inflows: “The massive ETF inflows are driven by a declining U.S. dollar index and Bitcoin’s growing appeal as a safe-haven asset amid equity market volatility. Bitcoin’s reduced correlation with equities positions it as a diversification tool, but short-term challenges like weak investment signals still require sustained macroeconomic catalysts.”
Bitcoin’s narrative as a safe-haven asset has strengthened in recent days, reflecting its resilience and price movements similar to gold, even as bond yields and U.S. equities have corrected due to the ongoing tariff conflicts.
Earlier this week, President Donald Trump expressed no intention to remove Federal Reserve Chair Jerome Powell and suggested that a trade deal with China could lead to significant reductions in tariffs, which currently stand as high as 245% on some Chinese goods.
Despite these mixed signals, traders remain cautious, closely monitoring any new comments or developments for further clues on market positioning.
“While macro risks remain, one key concern seems to have been alleviated. Trump has signaled no intention to replace Powell, prompting a modest pullback in long-end yields and reducing a significant risk,” said QCP Capital, a Singapore-based firm, in a broadcast message. “However, the broader outlook remains complex, with trade tensions, geopolitical risks, and regulatory uncertainties continuing to loom large.”
