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Safe haven assets are things that tend to go up in value when there is prevalent uncertainty or fear in the world. Gold, Bonds, and the Japanese Yen are all considered Safe Havens.
Bitcoin is not a safe haven asset and bears little or no correlation with other traditional markets at this time. The cryptocurrency markets are still too small to have any effect on other markets.
The entire market cap of all cryptos is now about $100 Billion. To put it in perspective, the market cap of just the S&P 500 in the USA is standing at more than $20 Trillion.
So, the answer is no. Not in a traditional sense anyway. However, the practical use cases in specific countries like Venezuela, Argentina, Zimbabwe, Iran, Iraq, Egypt, and even Russia, that are seeing extreme currency risk proves that bitcoin is an excellent store of value.
So though it does not correlate at the moment, this is a form of digital gold.
Bitcoin is not a safe haven asset and bears little or no correlation with other traditional markets at this time. The cryptocurrency markets are still too small to have any effect on other markets.
The entire market cap of all cryptos is now about $100 Billion. To put it in perspective, the market cap of just the S&P 500 in the USA is standing at more than $20 Trillion.
So, the answer is no. Not in a traditional sense anyway. However, the practical use cases in specific countries like Venezuela, Argentina, Zimbabwe, Iran, Iraq, Egypt, and even Russia, that are seeing extreme currency risk proves that bitcoin is an excellent store of value.
So though it does not correlate at the moment, this is a form of digital gold.
-Mati Greenspan
eToro, Senior Market Analyst
Please note: All data, figures & graphs are valid as of June 15th. All trading carries risk. Only risk capital you can afford to lose.
Market Overview
The traditional markets went on a wild ride yesterday. There was a big swing down, then a big swing up only to wind up in the same place it started.
Though volatility spiked around the time of the Fed meeting, the VIX volatility index still closed at near record low levels.
As was widely expected by the markets, the Fed did indeed raise their interest rates by 0.25% despite stagnant inflation and wage growth.
The headlines that are saying that Fed has defied inflation but actually what’s happening is that they’re playing a huge game of chicken with the financial markets.
If the Fed blinks at this point or acknowledges that the economy isn’t doing well, it could set the already overvalued stock market for a tumble… and we wouldn’t want that.
What was more important yesterday was the Fed’s aggressive stance in offloading their bloated balance sheet. They have about $4.5 Trillion worth of assets that they purchased during the quantitative easing from 2009 to 2014 that they would like to start selling back to the market by the end of the year.
It’s a move intended to show confidence in the economy.
Full article with charts: https://hacked.com/is-bitcoin-a-safe-haven/