Bitcoin is a Bad Safe Haven Asset - page 2.

kryptqnick

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Quote from: Agios on June 16, 2020, 08:02:21 AM

During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets. Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations. As a result, crypto assets tend to be insecure from recession shocks.

There are two requirements that must be met in order for an asset to be an effective safe haven,
First, the volatility (level of up and down) the value of assets must be low. Second, when market volatility surges, the value of assets must increase.

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks,

You can say Bitcoin is a bad safe haven or a good currency which is not a safe haven. In any case, Bitcoin did not do terribly bad. While initially the price dropped spectacularly, within a couple of months Bitcoin recovered to its pre-quarantine price. And it's the best performing asset of 2020 so far if you think of it as an asset. So while it's not a great solution to every problem, it might be the best humanity currently has available.

Quote from: FIFA worldcup on June 17, 2020, 09:10:22 AM

Quote from: JAndelin on June 16, 2020, 08:08:14 PM

Bitcoin might not be a "safe haven" asset right now, but it is becoming one. Those who have the forsight to see that will reap great rewards.

Bitcoin is always a safe investment and even now you can blindly invest in bitcoins now and see the results in 2 years. This does not mean that alts are also safe heavon. Alts and crypto other than bitcoin is a risky investment.

Bitcoin is also a risky investment, even if not as risky as altcoins. There's no way of telling that the price in 2 years won't be worse than it is right now. If you take June and take it 2 years back at a time, it's been always the case that the price has been growing, but there's no guarantee the trend will continue and ever since the drop of the price in 2018 it's been volatile but very rarely breaking the $11k barrier.

FIFA worldcup

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Quote from: JAndelin on June 16, 2020, 08:08:14 PM

Bitcoin might not be a "safe haven" asset right now, but it is becoming one. Those who have the forsight to see that will reap great rewards.

Bitcoin is always a safe investment and even now you can blindly invest in bitcoins now and see the results in 2 years. This does not mean that alts are also safe heavon. Alts and crypto other than bitcoin is a risky investment.

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Quote from: serjent05 on June 16, 2020, 10:13:40 AM

~snip~
I definitely agree, and among the cryptocurrency I think one of the best safe haven asset in a very short period of time are the stable coins.

Yes, stable coins are a safe haven asset choice that is quite stable for investment. Stable coins are assets whose value is based on the value of physical objects whose prices are stable such as gold, commodities or the United States dollar. The stable value of coins is very low unlike other cryptocurrency.

Ridwan Fauzi

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I don't think the dollar can't be called as a safe haven asset as well. As you can see now, the dollar price has been decreasing slowly after the ongoing racism problem. Yeah, I agree for the user who called bitcoin is a currency like dollar and etc, so its price can be followed with the traditional investment place like stock and etc. This is why when the coronavirus came, bitcoin price even all crypto currency prices were decreasing.

There is just one can be called a safe haven asset and that is gold. During the crisis came, a gold price just increases and has done an opposite with the other investment place. Indeed, you are not safe if you choose crypto currency as a way to store all your fund, there is some risks that will be faced. You may need to choose gold to store your fund if the crisis comes.

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People will free to choose bitcoin and altcoin as their safe haven asset or investment, and there is no force to use bitcoin and altcoin to save your money as an asset in the cryptocurrency. If you really want to have a safe haven asset, you can choose gold and save it in your deposit box because the gold price is not too fluctuate than bitcoin and altcoin.

But people who involve in the cryptocurrency for a long time will still invest in bitcoin because they believe that bitcoin will be rise high, and the price will be increased so high in the future. People would like to buy more bitcoin if the price is down because that means they can have more bitcoin in their wallet, so they can sell it once the price goes back to the higher rate.

So that depends on yourself, whether to use bitcoin and altcoin or gold as your safe haven asset, and you should know the risk for investing in the crypto and gold.

Latviand

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Quote from: JAndelin on June 16, 2020, 08:08:14 PM

Bitcoin might not be a "safe haven" asset right now, but it is becoming one. Those who have the forsight to see that will reap great rewards.

Those who trust in bitcoin during its downfall will really benefit its value when its high peak season occurs.

Bitcoin is really not a good store of value compared to other assets right now, there are a lot of factors that could have triggered its volatility. Some people are scared to hold bitcoin because of the pandemic that is happening right now. Soon, I believe that bitcoin will become the best safe haven asset, it has the ability to improve and increase its price just like gold, agricultural land, and etc.

It will probably make those bitcoin investors profitable enough in 10 - 20 years, if you are a bitcoin holder, just continue to manipulate it and huge profits will approach us.

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Quote from: Wind_FURY on June 17, 2020, 01:28:24 AM

Price and volatility shouldn't be the only characteristics of "an asset" to be considered as a "safe haven" in my opinion. Venezuala had their "safe haven" in gold held by a London bank, and the bank won't give it back to them. Not your vault, not your gold.

Not every safe haven asset has all of the characteristics that describe "ideal" safe haven asset. According to https://www.ig.com/us/trading-strategies/what-are-safe-haven-assets-and-how-do-you-trade-them--181031 an ideal asset should has following characteristics to be considered safe haven:

Quote

Liquidity: the asset needs to be easily convertible to cash, at any time

Functionality: the asset needs to have a use that will continually provide long-term demand

Limited supply: the growth of supply should never outweigh the demand

Certainty of demand: the asset is unlikely to be replaced or become outdated

Permanence: the asset should not decay or rot over time

Bitcoin currently has 4 out of 5 characteristics and can be considered safe. What it doesn't have yet is "certainty of demand", that is why bitcoin is volatile, meaning that its price fluctuates i.e. price is still being discovered.

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Quote from: palle11 on June 16, 2020, 06:34:38 PM

I think safe heaven is far with bitcoin. Bitcoin investment can drop at anytime. It can only be regarded safe at the time is up there and investment is growing or stable and not dropping. So, for investing sake, it can be called safe momentarily.

As a safe haven, I will go for GOLD. Bitcoin can only a good for a short-term investment, once you manipulate it properly depending on its season, then you can get a huge profit out of it. But think about the future, Gold are really the store of value compared to other assets that you can hold.

Bitcoin is volatile in the market, while Gold only increase its price depending on the time. Although they are both limited and non-renewable, still bitcoin is dependent on the market situation while Gold is dependent on the time. During times like this, you can invest in bitcoin so that you will know the difference between the two as a safe have asset.

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Quote from: Agios on June 16, 2020, 08:02:21 AM

During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets. Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations. As a result, crypto assets tend to be insecure from recession shocks.

There are two requirements that must be met in order for an asset to be an effective safe haven,
First, the volatility (level of up and down) the value of assets must be low. Second, when market volatility surges, the value of assets must increase.

Price and volatility shouldn't be the only characteristics of "an asset" to be considered as a "safe haven" in my opinion. Venezuala had their "safe haven" in gold held by a London bank, and the bank won't give it back to them. Not your vault, not your gold.

witcher_sense

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There is no such terms like "bad safe haven asset" or "good safe haven asset" or "perfect safe haven asset". Any asset can be safe haven if it has certain characteristics on the present time or the past time, while we are talking about it, because we can't foresee the future. What we can do is analyzing the past behavior. Does it mean that a particular asset will behave in the same way it did in the past? Most probably yes, but this will still be guessing game with a high probability to win. Gold is a safe haven asset except it wasn't when executive order 6102 was made, for example. Bitcoin is also safe haven asset, because it is similar to gold except no one can take away it from you. Everything is relative, under some circumstances which are unknown in advance it can either become a safe haven asset or lose its role to be it.

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Quote from: Agios on June 16, 2020, 08:02:21 AM

During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets. Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations. As a result, crypto assets tend to be insecure from recession shocks.

There are two requirements that must be met in order for an asset to be an effective safe haven,
First, the volatility (level of up and down) the value of assets must be low. Second, when market volatility surges, the value of assets must increase.

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks,

Your comment is filled with assumptions. Remember that facts are sacrosanct and anything devoid of it is doubtful. Where are the facts of the argument you put up here? Well, while you go on arguing this, a lot of people won't even be bothered. Monies are exchanging hands and people are smiling all the way to the bank. For me, at least, the recent happenings are proving that Bitcoin is a better store of value than fiat at this time. Fiats all the world are crashing but Bitcoin is still holding its ground.

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Quote from: Agios on June 16, 2020, 08:02:21 AM

During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets. Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations. As a result, crypto assets tend to be insecure from recession shocks.

There are two requirements that must be met in order for an asset to be an effective safe haven,
First, the volatility (level of up and down) the value of assets must be low. Second, when market volatility surges, the value of assets must increase.

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks,

First and foremost, I don't think I agree with you on the above statement. You need to understand that the crypto market has always be volatile and that has also been its unique feature. Secondly, how well have you been monitoring the crypto market in terms of the market value of Bitcoin during this pandemic ? Comparing the rate at which the price of Bitcoin has dropped during this pandemic and that of the previous price drops, we can all testify that Bitcoin has been quite stable during this period. I think you don't really understand what a safe haven is. You should try and gain enough knowledge on the entire cryptourrency portfolio before concluding based on the little knowledge.

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Quote from: Coin_trader on June 16, 2020, 09:02:23 AM

Quote from: Agios on June 16, 2020, 08:02:21 AM

During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets. Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations. As a result, crypto assets tend to be insecure from recession shocks.

There are two requirements that must be met in order for an asset to be an effective safe haven,
First, the volatility (level of up and down) the value of assets must be low. Second, when market volatility surges, the value of assets must increase.

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks,

One thing is for sure. BTC is really not a safe haven if you are doing a daily trade. Stable coins like Paxos, Dai and USDT are the best safe haven in case of financial crisis hits since they are pegged to USD. There is no asset/crypto currencies that safe during financial crisis except stable coin. All cryptocurrencies are dependent on the world economy.

But if you look in bigger picture. BTC price is rising slowly over a period of time. So in conclusion might be considered as safe haven if you are investing for your future.

When the coronavirus pandemic suddenly appeared, there was no financial crisis. People urgently needed cash and to a large extent they began to sell cryptocurrency. How Bitcoin and other cryptocurrencies will behave during the current global economic crisis, we will soon see when it, most likely, comes after the victory over the coronavirus, or even during it, if such a fight drags on. It is expected that when a real global economic crisis sets in, in this case the cryptocurrency will have to prove itself as a reliable refuge from inflation.
Stable coins cannot be a safe haven during the economic crisis and inflation of ordinary currencies, since they are the same currencies of states, only in digitized form. When the regular currency becomes cheaper during inflation, the stable coin with which it is provided also automatically falls. At the same time, this is not noticeable at the rate of a stable coin, since its price remains equal to the price of this ordinary currency.

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Quote from: Agios on June 16, 2020, 08:02:21 AM

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks

So which one among the two asset class you mentioned is a better safe heaven then, is it supposedly the stock that got racked with bitcoin (cryptocurrency) during the market meltdown and couldn't rise back up or bitcoin that went down but has surpassed it's previous highs before the pandemic?

When it comes to picking an asset as a safe heaven I think it basically depends on personal opinion, are you looking for an asset that won't or unlikely to depreciate that much in price when the market get affected or the asset that'll be the most likely to bring you high profit when the market conditions are favorable for growth?.

Personally, I will go with growth in profit instead of security in regards to stable price like Gold.

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If you want to invest safely is investing in using gold or your money to buy land/house. Gold is very different from cryptocurrencies because the price is always stable. But if you decide to invest in crypto, you should also be prepared to bear the risk. Crypto is very easy to change because it is influenced by global news. It really promises to invest in crypto.

Prices increase so fast but prices can also go down quickly. So that makes investing in cryptocurrencies have a risk. But if you want to invest in the long run, I think you will benefit in the future. And I will invest in Bitcoin and Ethereum.

Darker45

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Bitcoin is a Bad Safe Haven Asset

What is this? It sounds incoherent to me.

So are you primarily saying that Bitcoin is a safe haven asset? However, as a safe haven asset, it is bad. Is that what you are saying?

I cannot see the logic with it. If it is bad and it does not meet the requirements of a safe haven, then it is definitely not a safe haven at all.

Or is it? But a bad one. LOL!

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Saying all that, you can say that it's wrong just because of the volatility. Maybe people are looking for something a more stable thing like gold, but you cannot correlate it to that because it's a different thing, and people have different views on it. Anyways, it could be dependent as well with the perspective of a person because they believe in that kind of investment. Think about it.

Your terms of safe haven are

Low Volatility | Definitely not in cryptomarkets
The market surges, the value must increase | Happens in cryptomarkets

With your ending statement

Quote from: Agios on June 16, 2020, 08:02:21 AM

Although in the current crisis, the trading volume of crypto assets is increasing, it merely compensates for the value of other declining assets, such as stocks,

You were unclear on what you are trying to say, and it seems like you are for Bitcoin is a safe haven because of the trading volume it produces. So what are you talking about?

JAndelin

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Bitcoin might not be a "safe haven" asset right now, but it is becoming one. Those who have the forsight to see that will reap great rewards.

Yamifoud

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Bad safe haven? I think it was overly acted on it. Maybe it was enough to say not a safe haven asset as it really it was.

With this kind of volatility, you can't either think about safe but just wondering why a lot of people come into crypto? Have they care about the risk and NOT a safe haven? Pretty sure they are not that much but they are looking the opportunity inside. It is something to find risk in all kind of investment, may we consider crypto investment is riskier than the others but that be considerable enough to manage.

DoublerHunter

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^ The last part of the sentence is the answer to your question.
If you notice that the bitcoin price was increased even in the middle of the pandemic crisis. Technically, there is no correlation between the pandemic and the cryptocurrency price. Nevertheless, bitcoin was not created for safe haven, we know that it is a highly volatile asset that traders make a profit. Bitcoin is useful for trading and for payment methods. If you invest this and treated like a bar of gold or other valuable stone, you , just know how bitcoin works. Moreover, there is no safe haven asset.

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