Investors Shift to Safer Crypto Assets Amid Market Uncertainty

Investors are shifting their focus towards safer digital asset investments as speculative appetite wanes in the crypto markets. This shift is driven by recent memecoin scams and macroeconomic uncertainty, leading investors to seek more secure options.

Bitcoin’s hot supply metric, which tracks the amount of Bitcoin aged one week or less, has decreased significantly. This metric dropped from 5.9% at the end of November to 2.3% on March 20, indicating a move towards safer investment strategies amid market volatility. According to Ryan Lee, chief analyst at Bitget Research, this decline signals that investors are adopting a more cautious approach during uncertain times.

Lee noted that during periods of uncertainty, investors are not only seeking security but also making rational decisions. In many cases, this rational choice is represented by Bitcoin. This trend reflects a more pragmatic approach to investing, where investors are prioritizing stability over speculative gains.

The stablecoin supply ratio (SSR), which measures the ratio between Bitcoin and stablecoin supply, also suggests that investors are hesitant to take on significant new positions. The SSR ratio stood at an over four-month low of 8, last seen at the beginning of November 2024, when Bitcoin was trading at $67,000. Historically, SSR values below 10 indicate relatively low stablecoin buying power among investors compared to Bitcoin’s market cap.

This cautious positioning aligns with the sentiment among traditional market participants. Enmanuel Cardozo, market analyst at a real-world asset (RWA) tokenization platform, noted that US stock market trends often set the tone for risk-on assets like crypto. Despite the current uncertainty, these corrections are normal and highlight where the real value lies as the market continues to mature and educate itself.

Despite the growing investor caution, Bitcoin has outperformed all major global assets since the US President Donald Trump’s election. This includes the stock market, equities, US treasuries, real estate, and precious metals. The cooldown in Bitcoin’s hot supply metric shows faltering speculative appetite, according to technical analyst Kyledoops. This means fewer fresh coins in circulation, reduced liquidity, and lower market participation.

Despite the current lack of risk appetite, analysts remain optimistic about Bitcoin’s price trajectory for the rest of 2025. Price predictions range from $160,000 to above $180,000. This optimism is based on the belief that Bitcoin will continue to be a safe haven asset, even as investors become more cautious in their approach to the crypto markets.