Looking back on this week's cryptocurrency market, I don't think it's appropriate to dismiss it simply as a sharp drop in Bitcoin prices. Rather, what was symbolic was the simultaneous malfunction of what had been believed to be a "safe haven."
President Trump's nomination of hawkish Kevin Warsh as the next Federal Reserve Chairman threw cold water on the market's assumption of a rate cut this year. Positions that had been built up in anticipation of monetary easing were forced to be reassessed en masse.
Shortly afterward, gold's historic collapse occurred. The largest decline in 46 years was not simply a matter of supply and demand; it implied a loss of confidence even in assets that had been seen as a "safe haven."
At this moment, the market was told, "This time, there is nowhere to go."
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