Global financial markets are volatile, and Bitcoin is currently struggling to take on the role of a safe-haven asset.

March 9, 2020, is destined to become an important day in financial history.

After the "Black Monday" in 1987, the US stock market began to implement a circuit breaker mechanism. For decades, this mechanism was only triggered for the first time on October 27, 1997, when the Dow Jones Industrial Average fell by 7.18%, marking the largest single-day drop since 1915.

However, under the impact of multiple factors such as the spread of the COVID-19 pandemic, the U.S. presidential primaries, and the sharp decline in oil prices, on March 9, 2020, the U.S. stock market crashed again, triggering the circuit breaker mechanism for the second time in history, causing global stock markets to fluctuate.

Meanwhile, the cryptocurrency market has also not been spared. Bitcoin, known as "digital gold", plummeted from $9,170 to $7,680, consecutively breaking through the two key support levels of $8,000 and $7,800, with a decline of nearly 20% in two days. The liquidation amount of futures trading on several major exchanges reached nearly $700 million.

Analysts generally believe that the sharp decline in the U.S. stock market is the result of multiple overlapping factors, including the spread of the COVID-19 virus, the Middle Eastern oil price war, and the U.S. presidential primary elections. It is worth noting that before this decline, the global financial market was already showing signs of insufficient liquidity, and market performance was below expectations. In fact, market funds are not as abundant as one might think, and coupled with the prevalence of leveraged trading, it can easily trigger a liquidity crisis.

The synchronized decline of the global financial markets has sparked a demand for hedging among investors. Panic has driven more and more people to sell stocks and exit the commodity futures market, with funds flocking to traditional safe-haven assets such as gold, cash, and government bonds.

In the blockchain industry, Bitcoin is often regarded as an alternative safe-haven asset with value storage function due to its scarcity. During the economic crisis in Venezuela, Bitcoin was one of the hedging options for local citizens. However, in this global financial asset crash, Bitcoin did not exhibit a similar upward trend as gold; instead, it experienced a significant decline.

So, can Bitcoin, known as "digital gold", truly play the role of a safe-haven asset when needed?

In this regard, some senior analysts hold a negative attitude. They believe that the current view of Bitcoin as a safe-haven asset is overly optimistic. Firstly, the market size of Bitcoin is relatively small, making it difficult to withstand a sudden influx of huge safe-haven funds from traditional financial markets. Secondly, Bitcoin's price is highly volatile, having tripled in the first half of 2019, only to drop nearly 50% in the second half. Such strong volatility makes it difficult for professional investment teams to regard it as a reliable safe-haven tool.

From a risk-hedging perspective, Bitcoin currently falls far short of gold. Due to the market depth being relatively insufficient compared to the vast funds in traditional finance, and the mainstream investors' understanding and consensus on Bitcoin still needing improvement, Bitcoin is currently more seen as a high-volatility risk asset that is highly correlated with liquidity, rather than a safe-haven asset.

Nevertheless, Bitcoin's current positioning as a risk asset does not mean it can never become a safe-haven asset. Compared to traditional financial markets, Bitcoin still belongs to a niche asset class. While it is still too early to call it a safe-haven asset, Bitcoin has undoubtedly come the farthest and holds the most potential on the road to becoming "digital gold."

It is worth noting that the above views are for reference only and do not constitute investment advice. The cryptocurrency market is highly volatile, and investors must remain rational.