The price of bitcoin dropped sharply Monday as investors began shedding risk amid a global equity markets decline.
Many people have argued that bitcoin is most useful as a safe-haven asset, but that narrative could be changing as people realize its price often goes down with broader declines in risk assets. Bitcoin’s rally this year has coincided with the risk-on rally and, much like stocks, the cryptocurrency is prone to sharp declines in September.
Bitcoin lost as much as 10% on Monday morning. It was last down more than 7% at $43,790.25, according to Coin Metrics. The broader crypto market was in the red too, with ether down 8.5% to $3,060.80, as were crypto-adjacent stocks. Coinbase and Microstrategy lost 3.5% and 4%, respectively, while Square slipped by 2%. In crypto mining stocks, Riot Blockchain fell 6% and Marathon Digital fell 5%.
“This sell-off is the continuation of a well-established pattern where traders cash in their riskier assets to cover margin calls or sit on the sidelines until markets calm down and they feel more comfortable going back into riskier positions,” Valkyrie Investments CEO Leah Wald told . “If ever bitcoin had the opportunity to establish itself as a safe haven or as digital gold, with U.S. companies also signaling their earnings calls are going to reveal poor results, now feels like the time.”