"Digital Gold" loses its luster! Bitcoin plummets again, losing its "safe-haven" aura, with market value evaporating by hundreds of billions of dollars in a week

The Zhitong Finance APP noted that after experiencing a week-long plunge and a market value evaporation of hundreds of billions of dollars, Bitcoin once again failed to fulfill its promise as a safe-haven asset. This cryptocurrency, hailed as a tool to hedge against market turmoil—the "digital gold" of the blockchain era—continued its downward trend during Friday morning trading in London. Its price briefly fell by 3% to below $105,000. The second-largest token, Ethereum, dropped below $3,800, retreating over 20% from its peak in August. Meanwhile, the BNB token associated with Binance plummeted by 11% on Friday. From October 10 to 11, due to users encountering technical failures and price discrepancies, this largest global cryptocurrency exchange was deemed by analysts to be a major driver of a record liquidation wave exceeding $19 billion. Following the crash, Binance has offered nearly $600 million in compensation to users and businesses. Bitcoin had just set a historical high of $126,251 on October 6. Days later, escalating trade tensions between China and the U.S. triggered over $19 billion in liquidations, with most mainstream tokens facing significant sell-offs simultaneously. Although industry giants like Kraken, Circle, BitGo, and Ripple have sought trust licenses, payment channels, and credit card products to delve deeper into regulated financial sectors, the market has struggled to achieve sustained recovery. BTC Markets analyst Rachel Lucas stated, "It is noteworthy that this plunge coincides with major institutions seeking banking licenses." She added that the shift towards traditional financial infrastructure "signals a strategic hedge against volatility aimed at establishing legitimacy." The risks arising from U.S.-China trade frictions continue to plague risk assets beyond cryptocurrencies. The bankruptcies of First Brands Group and Tricolor Holdings have reignited concerns over hidden credit losses, while Zion Bank (ZION.US) and Alliance West Bank (WAL.US) wiped out over $100 billion in market value for U.S. banks in a single day due to fraud-related write-downs. As risk aversion swept the market, investors withdrew a net $593 million from Bitcoin and Ethereum exchange-traded funds listed in the U.S. on Thursday. The Bitcoin put/call options ratio on the cryptocurrency derivatives platform Deribit rose to 1.33 in the past 24 hours, indicating increased activity to hedge against further price declines. While traditional safe-haven assets like gold and silver continue to hit new highs, Bitcoin has disappointed. As of the week ending October 12, it had fallen by 6.3%, marking its worst performance since early March, and has yet to rebound. Most cryptocurrencies also exhibited weak performance. Bitwise Chief Investment Officer Matthew Hougan stated, "Most importantly, I believe cryptocurrencies are like canaries in the coal mine, indicating that the market is under stress due to emerging credit concerns." ”