Bitcoin (BTC) has spent much of the last week in freefall, sinking to a low of $8,520, just as the Coronavirus outbreak prompts widespread panic in the financial world due to its potentially cataclysmic impact on the global economy. This negative correlation between a global crisis and the value of the world’s largest cryptocurrency is fuelling doubts that Bitcoin may not actually be a safe haven asset, as previously thought.

A safe haven asset is an investment that investors turn to during times of market volatility and instability, in order to “weather the storm,” and are typically immune to market volatility or may even perform better. For example, gold is the archetypal safe-haven asset as it is a physical commodity, cannot be printed like money, and its value is not impacted by interest rate decisions made by a government. Bitcoin had recently been viewed as a possible safe-haven asset as its value has increased in times when the global economy looks vulnerable.

However, Bitcoin has seen about 15% of its value wiped out since February 11, just as COVID-19 began spreading outside of China, raising questions as to whether it can be considered a safe haven or not.“Bitcoin has been uncorrelated to other asset classes,” said crypto analyst at Coinist Research, Luke Martin. “If stocks drop, this does not mean bitcoin has to pump. If gold prices climb, this does not mean bitcoin will rise with it every time.”

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The negative correlation between the value of Bitcoin and the outbreak of the Coronavirus indicates that crypto speculators have returned to assessing BTC based on its own metrics, given that its value isn’t derived from the same indicators as fiat currencies, like interest rates and GDP. Instead, Bitcoin is driven purely by demand, which is why it often remains steady while other markets look fragile.

Bitcoin’s current value is US$8,790.

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Crypto exchanges have made it easier for millions of people to trade in cryptos, but they have also been found to be vulnerable to attacks, and today, two crypto exchanges, Bitfinex and OKEx, reported Distributed Denial-of-Service (DDoS) attacks.

OKEx stated that the exchange suffered the attack last night, but none of its users were actually affected by it. Bitfinex appears to have been the subject of a similar attack today, and the extent of the attack is not yet known. The company took to Twitter and stated that the matter is currently being investigated.

Key Details

It goes without saying that this is not the first time that exchanges have been subjected to such attacks. A spokesperson for OKEx stated that that the company’s servers were flooded with internet traffic in a malicious attempt to disrupt its functioning. The Chief Executive Officer of the company, Jay Hao, stated that the large-scale attack was orchestrated by competitors.

Users of Bitfinex will be waiting to hear about the source of the DDoS attack and whether any accounts have been affected by the attack or not.

Bitfinex stated that normal activity has been resumed on the exchange after it put in place a “stricter protection level.” The Chief Technology Officer of the exchange, Paulo Ardoini, stated that although the exchange has advanced DDoS prevention mechanisms in place, the latest attack came about from a large number of different IP addresses. This means the system was crippled.

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OKEx spokespersons stated that the company has around-the-clock monitoring and technical support in place, which is why the company was able to repel the attack within a short span of time. While this was a bit of a setback for the exchanges, crypto enthusiasts would hope that OKEx and Bitfinex are not afflicted by it in the future.

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