Bitcoin, the top cryptocurrency, has experienced a major drop similar to Nvidia and other AI-related stocks. This challenges the idea that Bitcoin is a reliable store of value. Concerns about stagflation and a possible delay in essential rate cuts by the US Federal Reserve are causing the sell-off of Bitcoin and other risky assets.

Bitcoin and AI Stocks: Falling Together

According to CNBC's Michael Santoli, the recent performance of Bitcoin goes against the common belief that it is a stable store of value. Since mid-2023, Bitcoin has been considered as the future along with AI stocks. However, the cryptocurrency is now dropping in value along with other risky assets due to concerns about stagflation and possible Federal Reserve actions. If the Fed decides not to cut rates this year, it could be bad news for the crypto market.

Is Bitcoin Heading into a Bear Market?

After a significant drop in April, Bitcoin started May with another notable decrease in price. It is currently trading at $57,904 on major exchanges, down from its previous value of $56,637. Even though there is a lot of hype around Bitcoin ETFs, Bitcoin critic Peter Schiff believes that it is definitely in a bear market. On the other hand, Bitcoin ETFs are being traded at significant discounts according to Bloomberg. Despite this, Bitcoin is still up about 36% for this year.

In Conclusion

The recent drop in Bitcoin's value alongside Nvidia and other AI-related stocks raises doubts about its future as a stable store of value. With concerns about stagflation and potential Federal Reserve actions leading to the sell-off of Bitcoin and other risky assets, investors and market observers will be closely watching how Bitcoin performs in the coming months.