Is bitcoin a safe haven for investor capital?
New reports suggests that it really is, with commentators contending that there’s an actual flight of Chinese money right now into Bitcoin as a safe haven asset as a way of beating inflation and sitting out the tremendous turmoil that may be caused by international trade conflict.
For months, investors have watched global markets struggle against souring after major American and Chinese advances that pit the two major economic superpowers against one another.
The American president rails against China as a fiendish currency manipulator and general untrustworthy trade partner – the Chinese reiterate that they will not cave to American demands.
Now, analysts are seeing this turbulence being tremendously good for Bitcoin as strategic moves by American and Chinese banks unsettle the investor base.
“Investors are becoming increasingly nervous as central banks have demonstrated they will continue easing,” writes William Suberg at Cointelegraph, describing why investors may want to make the move into crypto. “Late last week, the United States Federal Reserve announced that it would cut interest rates and less than a week later China devalued its currency.”
In general, experts are pointing to several major reasons why Bitcoin really is a practical safe haven in times when fiat currencies are under pressure.
One is the Bitcoin market’s non-correlation with traditional markets.
BTC fan Anthony Pompliano, quoted in a story by Horus Hughes, puts it like this:
“(Bitcoin has) proven to be non-correlated and to provide an asymmetric return compared against traditional assets.”
One way to this is simply explain this is that investors see Bitcoin as “digital gold” – it doesn’t live or die with fiat currency values, and it represents a different kind of asset that has its own independent value.
That’s a lot of what attracted people to gold over the years, but Bitcoin is far more fungible and liquid then actual physical gold. All of these realities have seasoned analysts trumpeting the potential rise of BTC in this year’s markets. Stay tuned.