Bitcoin and Gold ditched their safe-haven narratives to move alongside the risky U.S. equities amid a global healthcare crisis.
While Bitcoin crashed to below $4,000 in an overnight dump on March 12, Gold logged its worst week in eight years.
Both hedging assets suffered because of significant market manipulations in their market, according to researchers at the University of Sussex Business School.

Why Bitcoin, a perceived safe-haven asset, did not rally in the face of a global macroeconomic crisis? A U.K.-based research team answered with findings indicative of “intense and large-scale market manipulation.”
Record-level Manipulation
Researchers at the University of Sussex Business School’s CryptoMarketRisk project team tracked trades across the safe-haven markets since March 2020. The analysis led them to spot large sell orders on gold futures, a literal pump-and-dump on copper futures, and large spoofing orders on bitcoin derivative exchanges.
“Some single trades on COMEX have been so large as to move prices – clear contraventions of US laws on market abuse,” the researchers found. “But widespread market turmoil means regulators such as the CFTC have a lot on their plates right now, meaning even large-scale manipulation of these markets to remain below the radar of regulators.”
Gold Futures had plummeted 14.87 percent in March in a massive liquidation | Source: TradingView.com, Comex
But in the case of Bitcoin, the actual market manipulation took outside the U.S. jurisdiction. Carol Alexander, Professor of Finance at the University of Sussex Business School, said Seychelles-based crypto derivatives exchange BitMEX allowed its bots to drive the bitcoin price down from above $8,000 to below $4,000.
“As the S&P 500 crashed in March 2020, gold had its worst week in eight years when it should have been its best, because of massive shorts on COMEX gold futures,” she explained. “Bitcoin has also been driven down by some pretty obvious manipulation bots on the unregulated crypto derivatives exchanges, especially BitMEX.”
Bitcoin Turns Risky
The research also made comparisons between the current and 2008 financial crisis by studying gold’s reaction to the falling S&P 500.
It noted that the Lehman Brothers collapse saw the correlation between the U.S. benchmark index and the yellow metal reaching minus 40 percent. Nevertheless, during March and April 2020, the relationship between the two was plus 20 percent.
The study replaced gold with bitcoin and found a similar correlation flip. Since its inception in 2019, bitcoin remained an uncorrelated asset. But as the cryptocurrency crashed in March 2020, its correlation with the S&P 500 topped at 63 percent. As of May, it had dropped but to a disturbing high of 40 percent.
BTCUSD and S&P 500 Correlation | Source: TradingView.com
While Bitcoin lately recovered to $10,000 and spot gold rebounded to its seven-year high, the correlation left both the safe-havens under broader downside risks.
A recent Bank of America survey of global fund managers found that they don’t see a V-shaped recovery on Wall Street. That means the Dow Jones, the S&P 500, and the Nasdaq Composite could reverse its surprising uptrend in the coming quarters unless supported by the Federal Reserve.
Repeating the March 2020 fractal, investors could use gold and bitcoin to cover their losses elsewhere. More so, they could dump the safe-havens for cash liquidity. CryptoMarketRisk researchers agree.
“The biggest beneficiaries of these market attacks, beyond those placing the trades, are holders of U.S. dollars and U.S. assets,” they said.