Bitcoin’s 24/7 liquidity: Double-edged sword during global market turmoil
Bitcoin’s continuous trading opportunities led to significant market movements, particularly evident during recent global turmoil triggered by a US trade tariff announcement. As the only major global asset available for trading during weekends, Bitcoin experienced steep sell-offs, highlighted by a drop from above $82,000 to under $75,000. Analysts suggest that weekend trading led to increased correlation with panic selling as other markets remained closed. While there was optimism that Bitcoin could diverge from traditional assets, reality proved otherwise as conditions worsened. Furthermore, many Bitcoin investors are described as overleveraged, which amplifies risk during low-volume trading periods, potentially leading to rapid price fluctuations. Despite these challenges, there are arguments for Bitcoin being a viable inflation hedge, as reiterated by industry experts. Overall, Bitcoin's 24/7 liquidity can both facilitate opportunities and heighten risks during times of market instability.
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