Bitcoin’s price slowed somewhat over the weekend after a largely positive past few days, falling below $73,000 in the early hours of Saturday, April 11. According to an on-chain analyst, investors have begun increasing their exposure to the world’s largest cryptocurrency by market cap.
Do investors use Bitcoin as a hedge against inflation?
In a recent post on Platform The cryptocurrency analyst revealed that this trend can be observed through the rotation of liquidity over the past few weeks.
Highlighting data from Checkonchain, Darkfost based its analysis on net capital turnover position change, which measures the flow of funds between major cryptocurrencies (bitcoin, in this case), stablecoins, and fiat currencies. This measure tracks whether investors are moving their capital into riskier assets (risk sentiment) or into risk-free assets (flight-to-safety sentiment).
Additionally, the Net Turnover metric calculates the 30-day net change in the realized value of a digital asset. According to Darkvost’s post, Bitcoin’s realized cap fell to a very low level of -$28.7 billion at the end of February.
Source: @Darkfost_Coc on X
Meanwhile, while Bitcoin’s realized cap dwindled, the market capitalization of stablecoins began to increase steadily, reaching over $6 billion. This rise in the stablecoin’s market value reflects a clear intention of investors to protect their capital, while its coincidence with a decline in Bitcoin’s market value represents the first time of such a rotation since the previous bear market.
According to Darkfost, this behavior appears to be gradually shifting, with Bitcoin’s realized cap recovering to -$3 billion, while the stablecoin’s market capitalization has fallen to -$1 billion. This shift indicates that investors are slowly starting to re-expose themselves to the market, which can be seen in Bitcoin’s recent price action.
Darkfoust added:
For now, this remains a modest development, but if this dynamic continues, Bitcoin will likely extend its ongoing recovery rally. It is interesting to note that this dynamic began to emerge precisely as the uncertainty surrounding the Iranian conflict reached its peak.
The analyst concluded that it appears that some investors are starting to view Bitcoin as a hedge against inflation and macroeconomic risks, especially in the current global market landscape.
Bitcoin price at a glance
As of this writing, Bitcoin’s price is around $72,800, reflecting no significant change over the past 24 hours. According to data from CoinGecko, the leading cryptocurrency rose more than 8% on the weekly time frame.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image created by DALL.E, chart from TradingView
Editing process Bitcoinist focuses on providing well-researched, accurate, and unbiased content. We adhere to strict sourcing standards, and every page is carefully reviewed by our team of senior technology experts and experienced editors. This process ensures the integrity, relevance, and value of our content to our readers.
