Bitcoin is far from becoming a safe haven asset and due to its high volatility it cannot be equal to Gold but if you do comparison between Cryptocurrency market and stocks. The stable assets seems to be in the verge of default, just look to what happened to oil.
Bitcoin in my opinion is a hedge against the upcoming worst financial crisis that will happen.
Topic: Bitcoin is a Bad Safe Haven Asset - page 3. (Read 834 times)
OP has a point here in order for an asset to become a safe haven it must deemed to be stable and lack any kind of sudden price actipns like what Bitcoin is experiencing, also the second principle isn't really necesarry to define of an asset is stable or not a price “increasing” won't really make an asset a safe haven we just need its ability to hold the original value of your capital that's why when the market is going crazy a lot of people tend to jump their cover on stablecoins as it acta out as a safe haven rpotecting their capital from the volatility of the market.
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.
Maybe you have just concluded this because the covid-19 crisis didn't take that long for the majority of infected regions in the whole globe and that govs used existing ressources to maintain its power over the monetary system.Govs in the most infected countries from the pandemic encouraged people to use cashless systems including crypto. Although those govs has already good experiences with crypto and have enough ressources to control it .
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.
During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets.
bitcoin is not an asset, it is a currency. and it is a very young one at that. seeing volatility in times of worldwide crisis does not mean it is or it isn't a safe haven.altcoins are neither currencies nor assets. majority of them aren't even safe to buy let alone see as an investment.
Quote
There are two requirements that must be met in order for an asset to be an effective safe haven,
bitcoin has a unique characteristic that nothing else has which will also make it an excellent option specially during recessions,...this characteristic is the fact that it is never following any other market.
If I live in the USA and follow your advice that it is a currency not an asset the feds will come for me.
Federal TAX law considers it to be an asset not a currency.
I wish it was considered to be a currency by USA law as I could cash in older coins and not pay capital gains.
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.
If we talk about profitability yes bitcoin is doing much good performance than any other forms of investment right now since the volatility and market movements is quitely impressive and I think many people think about watching to grab this since the current pandemic still happening right now. But let's see more from it since I'm still curious how far we can go if this crisis still happening in the world.
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.
Many sees Bitcoin and other altcoins as an "asset" since many investors are holding the coins thus, making it look like an asset like the stock and bonds where you can hold it but the reality is that it is a cryptocurrency. It is on the name already "cryptoCURRENCY". If the name is cryptoasset then it can be an asset but it doesn't.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.
The first one is an X for me already 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.
. No further explanation we know how volatile cryptocurrency is already.The second one, we saw crypto already react on different markets in times of up and down and we saw it last March. On the other side of that, we saw Bitcoin doubled its price after its recent low while the other markets went up by a bit only. This is a proof that no market is following crypto. Investors are the ones who are controlling it.
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,
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,
I think everyone cannot have the same perspectives about bitcoin. But you missed a valid point.
The pandemic affected every economy of the world, with the stock market, and oil market all suffering massive losses, does that mean investment in oil is not a safe haven asset?
We humans are the crypto currency market, and bitcoin was able to dump that way because most people panicked sold, needing several funds to stay locked at home for months.
This is why it is important to dyor, and understand the concepts and emotions behind every dump, so that you can analyse correctly your next decision on the market.
Cryptocurrencies are not seen as safe haven assets equivalent to gold, US dollars or state debt obligations.
Do you mean bonds? I can't believe you're comparing Bitcoin to dollars or bonds.
How much can you earn from holding fiat currency or bonds? Nothing.
Holding USD: -2% a year.
Bonds maybe up to 10% a year but your money is frozen for 10 years.
Savings account +2% a year in countries with low inflation. If inflation rises above 3% you get nothing.
Now with Bitcoin:
Bought in January 2020 > you're up 30%
Bought in January 2019 > up 60%
bitcoin has a unique characteristic that nothing else has which will also make it an excellent option specially during recessions,...
this characteristic is the fact that it is never following any other market.
this characteristic is the fact that it is never following any other market.
Recently it was following stock market pretty close. It crashed together with it, rebounded together, now just recently it had a small dip exactly as the stock market was dipping too.
Volatility is the biggest roadblock for Bitcoin's safe haven asset status, safe havens are supposed to predictably react to negative economic events, and with Bitcoin there's no such guarantee, Bitcoin would either crash or will continue doing what it was doing.
We know the differences in talks of volatility and crypto is really very unpredictable, it can indeed crash in a matter of short time this is why we should really
be prepared in all sorts of possible situation that could happen along the way.
Always put up in mind that invest on the amounts that you can afford to lose.
bitcoin has a unique characteristic that nothing else has which will also make it an excellent option specially during recessions,...
this characteristic is the fact that it is never following any other market.
this characteristic is the fact that it is never following any other market.
Recently it was following stock market pretty close. It crashed together with it, rebounded together, now just recently it had a small dip exactly as the stock market was dipping too.
Volatility is the biggest roadblock for Bitcoin's safe haven asset status, safe havens are supposed to predictably react to negative economic events, and with Bitcoin there's no such guarantee, Bitcoin would either crash or will continue doing what it was doing.
This is not necessarily the case at all. First off there is no such thing as a defined definition of what a safe haven asset is. There is no guarantee of any asset class ever increasing, technically.. now when markets crash, and crash hard, all asset classes tend to fall as well. A true safe haven asset can still fall but the point is that it doesn't fall as much, and is much less likely to go to zero..etc. Gold, the ultimate safe haven has never followed any of these safe haven principles you've laid out to a T, for example.
Well I think there is as proposed by Investopedia : https://www.investopedia.com/terms/s/safe-haven.asp
However, bitcoin is an excellent long term investment.
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.
Bitcoin and other cryptos even became stable and performed better during this crisis. If that's what you think that it's not a safe haven, you believe that. We're on a pandemic and this determines that cash is king. But once this pandemic ends, you'll see that bitcoin will have an unexpected jump once the injected money by US comes in to the market. You consider whenever that jump happens if it's a good safe haven or not but wait until this crisis is done.
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,
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,
Bitcoin wasn't created to become a safe heaven. Gold or other precious metals or even luxury watches are better than bitcoin as a safe heaven. The characteristics of a safe heaven you have pointed out, are correct! Especially the price volatility makes it even worse to consider as a safe heaven asset. No contradiction on that! I personally prefer gold as a safe heaven.
However, bitcoin is an excellent long term investment. If we compare bitcoin with all other assets class, you will see that bitcoin has outperformed every single one of them. So you need to understand what needs to be considered where!
During the financial crisis due to the COVID-19 pandemic, Bitcoin and Altcoin were bad safe haven assets.
bitcoin is not an asset, it is a currency. and it is a very young one at that. seeing volatility in times of worldwide crisis does not mean it is or it isn't a safe haven.altcoins are neither currencies nor assets. majority of them aren't even safe to buy let alone see as an investment.
Quote
There are two requirements that must be met in order for an asset to be an effective safe haven,
bitcoin has a unique characteristic that nothing else has which will also make it an excellent option specially during recessions,...this characteristic is the fact that it is never following any other market.
copper member
Activity: 2800
Merit: 1179
Leading Crypto Sports Betting & Casino Platform
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,
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.
This is not necessarily the case at all. First off there is no such thing as a defined definition of what a safe haven asset is. There is no guarantee of any asset class ever increasing, technically.. now when markets crash, and crash hard, all asset classes tend to fall as well. A true safe haven asset can still fall but the point is that it doesn't fall as much, and is much less likely to go to zero..etc. Gold, the ultimate safe haven has never followed any of these safe haven principles you've laid out to a T, for example.
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,
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,
Jump to: