Investing.com - Bitcoin traded slightly lower on Thursday - in a third session of fighting over the $12,000 psychological level - as the debate over whether the largest cryptocurrency by market capitalization is a safe haven continued.
Bitcoin fell 1.7% to $11,855 on the Investing.com Index by 10:44 AM ET (14:44 GMT).
Amid the generalized selloff, total cryptocurrency market capitalization decreased to $305.52 billion, compared to $311.03 billion a day earlier.
As risk appetite returned to traditional financial markets, bitcoin’s move lower once again gave enthusiasts reason to correlate the move to an implied safe-haven status. The alt coin had risen a day earlier as concerns over global stocks spawned a flight from risk.
Brian Belski, chief investment strategist at BMO Capital Markets, however insisted that the bitcoin has been “excessively volatile” and is simply “the sexy kind of thing to go to now”.
“I think the longer-term perspective, in terms of bitcoin being that safe haven, I think it’s way too soon to call that,” he said in an interview with CNN late Wednesday.
Investing.com analyst Pinchas Cohen noted in a technical analysis released on Wednesday that the question remained up in the air.
“Whether Bitcoin did become a haven asset temporarily, or has become one permanently, or hasn't become one at all, the supply-demand map suggests a potential sales entry with attractive risk-reward ratios,” he said.
Gregor Horvat, founder of trading platform and Elliot Wave education website www.ew-forecast.com, looked past the noise in a commentary that also concluded that the short-term outlook was bearish.
Horvat said that a further move towards the $13,000-$13,500 range was likely “but after a correction!”
The digital currency has recently shown a high correlation to traditional haven assets such as gold or the Swiss franc, and an equally high inverse correlation to risk assets such as stocks and industrial commodities.
In other crypto sector news, Bloomberg reported that 318 addresses held at least $1 million worth of tether, equivalent to 80% of global supply. Such a high degree of concentration theoretically leaves the asset vulnerable to volatility if major holders become active traders.
Crypto fans were quick to downplay the report. “This literally means nothing,” Alan Silbert, founder of crypto and security token platform INX Limited, tweeted.
Other digital coin enthusiasts explained that the fact that most of tether is controlled by “300 addresses” is equivalent to the statement that “most of the U.S. dollar is controlled by 5 banks.” They accused the report of ignoring the fact those banks have millions of customers, much like those 300 exchange addresses. That criticism, arguably, overlooks the repeated problems that the operators of crypto exchanges and holders of wallets have had when it comes to distinguishing between their own money and their customers'.
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