Safe-Haven Assets Shine Amid Market Turmoil
As the global economy faces escalating trade tensions and a sharp downturn in equities, investors are seeking refuge in safe-haven assets. Bitcoin, gold, and the Swiss franc have emerged as key beneficiaries of this trend, with each asset demonstrating resilience in the face of market turmoil. The Swiss franc surged to 1.2500 against the dollar, gold neared a record high at $4,017, and Bitcoin rebounded to $112,800 after briefly dipping to $107,000.
Bitcoin ETFs Experience Modest Outflow
Despite Friday’s modest $4.5 million outflow from spot Bitcoin ETFs, the products still posted a $2.7 billion weekly gain, bringing cumulative inflows above $62.7 billion. This far outpaces the $1.7 billion outflow from the SPDR S&P 500 ETF. Major U.S. indices dropped over 2% as the Fear and Greed Index plunged from 53 to 29, signaling mounting investor anxiety. Analysts say the resilience of BTC, gold, and the franc reflects investor flight to assets with limited supply, central bank demand, and economic neutrality.
Characteristics of Safe-Haven Assets
Bitcoin is widely regarded as a safe-haven asset due to its tokenomics, with a supply limit of 21 million, high demand, and a continuing supply squeeze. The supply of Bitcoin on exchanges has plummeted to a multi-year low, as companies and ETFs continue to buy. Gold is also a major haven because many central banks have continued to accumulate it. Global central banks have purchased 900 tons of gold this year, and for the first time since 1996, they now hold more of it than U.S. Treasury securities.
Market Volatility and Safe-Haven Demand
The Fear and Greed Index has plunged, with the market volatility gauge moving to extreme fear, and the VIX hitting 23. Additionally, demand for safe-haven and junk bonds spiked. This happened as trade relations between the U.S. and China worsened, with President Donald Trump placing a “massive increase” in tariffs on Chinese imports, and China announcing a series of measures, including export controls and tariffs. The Swiss franc jumped to a multi-month high of 1.0763, and gold price jumped to $4,017, a few points below the all-time high of $4,053.
Investor Sentiment and Asset Performance
The net outflow from spot Bitcoin ETFs was just $4.5 million on Friday, despite this outflow, the funds scored a weekly gain of $2.7 billion, bringing the cumulative total to over $62.7 billion. Bitcoin’s ETF outflow was also much lower than the $1.7 billion of the SPDR S&P 500 ETF. The S&P 500, Nasdaq 100, and Dow Jones indices experienced a steep decline, falling by over 2%. BTC, gold, and Swiss franc held steady as the Fear and Greed Index tumbled to the fear zone of 29.
Fear and Greed Index has plunged | Source: CNN
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