Post
Topic
Board Bitcoin Discussion
Merits 4 from 3 users
Re: In times of turmoil, is Bitcoin really a safe-haven asset?
by
The Pharmacist
on 12/03/2020, 20:47:29 UTC
⭐ Merited by DdmrDdmr (2) ,kryptqnick (1) ,Heisenberg_Hunter (1)
It's odd to see something like this happening today since Bitcoin is a decentralized cryptocurrency. This should make it "immune" from real-world events whatsoever.
I disagree with that premise--bitcoin might technically be a currency, but in practice it's treated much more so as an investment, just like stocks and gold are.  People aren't buying bitcoin in order to spend it, and in times of crisis that would be foolhardy. 

Look at what's happening right now; this coronavirus panic is causing people to go to a very safe (for the short-term) asset--cash.  People are expecting this outbreak to cause quarantines and everything else that comes along with epidemics, so cash is useful for stocking up on food and supplies and consequently people are selling their investments.  Plus once a huge drop happens in the stock market (or the crypto market), it causes even more selling due to the fear of losing even more money. 

There's no way bitcoin is a safe-haven asset even in the best of times, and I say that based on its volatility alone.  And it's turning out to be even worse in a crisis.  I haven't done the math, but bitcoin has dropped something like $4k in the past month or two.  You tell me if that's an asset that people are going to flock to because they're scared.