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.
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.
Unfortunately, that's the harsh truth Bitcoin is facing today. It's more like a store of value than a real currency like the ones we know and love today (Fiat). Just like Gold, people tend to sell their Bitcoin in order to obtain cash for daily purchases. After all, Fiat is widely accepted among merchants and businesses worldwide than the pioneer cryptocurrency. Considering that Bitcoin is a highly-volatile cryptocurrency, it can never be a safe-haven asset that's good to use in times of turmoil. Negative events in the mainstream world will affect Bitcoin's prices in a bad way just like it's the case with stocks today.
While Bitcoin proponents have often claimed the cryptocurrency to be a safe-haven asset, yesterday it has proved them wrong. At least, 1 Bitcoin = 1 Bitcoin no matter what. In terms of Fiat, one would have to deal with the dreaded volatility until the market gains more liquidity. With ample regulations from governments worldwide, I'm sure the crypto market will mature like never before. As it's said in the real world, "Don't put all your Eggs in One Basket". Diversification is necessary if we want to survive unexpected situations in the mainstream world like the recent case of the coronavirus pandemic which has affected the worldwide economy. Just my thoughts
