It’s been a rough week for crypto.
Earlier this month, bitcoin was on top of the world, hitting yet another new all-time high of roughly $125,000. Around the same time, applications for a large number of increasingly speculative crypto exchange-traded funds (ETFs) were filed with the U.S. Securities and Exchange Commission (SEC), which some saw as signs of an overheated market.
A couple of weeks later, the bitcoin price now sits near the $105,000 mark, which is a 16% drop from the recent high.
Although bitcoin is often characterized as a sort of digital gold that can operate as a hedge against inflation and general economic turmoil around the world, the reality is that it is currently being outperformed by actual, physical gold amid the escalating trade conflict between the U.S. and China and other fears.
This points to the reality that, despite the massive price appreciation bitcoin has enjoyed over the past 16 years, it is still in many ways early days for the crypto market. In fact, bitcoin is currently more closely correlated to the traditional stock market than gold, according to data from The Block.
There may also be an increased separation occurring between bitcoin and the rest of the crypto market, as last week’s crash related to liquidations on leveraged positions in various crypto assets led to a continuation of the trend reversal regarding the decline of Real Bitcoin Dominance, as measured by bitcoin data portal Bitbo, that began in September.
