Bitcoin lost its allure as a safe-haven asset this week.
The world's first and most widely held cryptocurrency dropped 50% over the past two days. Bitcoin — sometimes referred to as "digital gold" — fell more than 30% Friday to its weakest level since March 2019, according to data from CoinDesk.
The cryptocurrency briefly dropped below $4,000 Friday after starting the week above $9,000. It later recovered to roughly $5,400 as of the close of U.S. markets. Bitcoin Futures, meanwhile, were on pace for its worst week since debuting in December 2017.
The digital currency had been trading near the $10,000 level in mid-February. The slide began later in the month alongside global markets reeling from the quickly spreading coronavirus.
"Bitcoin's recent price action is primarily a result of the coronavirus outbreak affecting global markets and driving investors towards the safety of cash," said Joe DiPasquale, CEO of crypto investment firm BitBull Capital. "With this sharp decline, Bitcoin's potential as a safe-haven asset is being questioned, but we believe it is too early to seek any correlations between Bitcoin and other asset classes."
The bitcoin nosedive came amidst volatile trading on Wall Street this week. On Thursday, stocks saw their worst since the "Black Monday" market crash in 1987. Stocks rose sharply Friday afternoon on the possibility of fiscal stimulus from governments around the world.
Other cryptocurrencies also dropped this week. The world second largest digital currency, ethereum, fell 46% this week while XRP lost nearly 40% of its value.