Topic: Could Bitcoin potentially serve as a safe haven in the upcoming economic crisis (Read 488 times)

It will take a very long time before the dollar losses its position as the strongest currency around the world, and even if at some point happens it is likely it will still be accepted on many countries after such event as this has been the case for a long time, now about the topic at hand bitcoin can serve as a safe haven, however its lack of stability makes it very volatile to perform this function without any issues, as during a crisis what people are looking for the most is a strong currency, and if at the time the crisis happens bitcoin is experimenting a bear market then the protection it can offer will be very limited.

I do agree, as much as China or even Brics or Russia wanting to dislodge the dollar as the top of the world reserved, it's not going to happen very quickly. Every nation still uses it as their mode of exchange to their local fiat and as you have said it won't lost it value as it will remain the top currency to be accepted globally.


Yes, and with that, we are still going to see bitcoin exchanges to dollar as still the best exchange rate that we are going to see. That's why you can see in cmc that bitcoin is equate to USD because everyone understand it. And for us who doesn't use dollar, for sure we can have our USD=local fiat rate as well that we can easily memorized because it's been the norm.

Dollar doesn't seem to be giving up its place, even with all those attacks and trying of dedollarisation, it is still at the top and not losing its place as it seems, as long as more people accept dollar than any other currency, then we are not going to have any big changes.

You can have dollars and go to ANY nation in the world and live, aside from maybe like north Korea or something. This is why I think it is quite important to remember that bitcoin may not reach there not because bitcoin is bad or something but because dollar is the king when it comes to currencies. Obviously it is not going to be that easy and it shouldn't really change much on the long run and shouldn't really be a big deal when you think about it.

Given bitcoin's volatility, in the short term bitcoin is never a good choice to hedge against inflation. As evidenced, we can see how in the 2022 crisis, bitcoin is also affected by rising inflation and rising interest rates, those who buy bitcoin for short-term speculation will definitely suffer losses. But in the long run, we can see that bitcoin holders from 2014 and 2015 delivered huge returns that far exceeded the rate of inflation.

As I said, with its scarcity and price appreciation over time, bitcoin is actually a much better hedge against inflation than gold over the long term. 

If we want to avoid inflation in the future, bitcoin is the perfect choice we have. Gold is stable and only maintains value but cannot increase in value like bitcoin, it's really not comparable to bitcoin.

I don't know which countries started to abandon the dollar. Maybe some Asian or African countries. But the rest of the world still uses the dollar to trade any goods. Especially now there are a lot of stablecoins, which are also used by many people in different countries. I don't think bitcoin can become a reserve currency, because it is not very convenient. Most likely bitcoin can become something like gold.

Well if you are actually following up the trend then you will notice that the dollar has already been having issues seriously and many countries are starting to replace the dollar as it's major currency for trade and so many stuff and as for the case of bitcoin I guess only time will tell as am very sure that bitcoin one day will eventually become the world reserve currency although we all know it's gonna a life time for that to happen but we just can't stop waiting it happens quick

Print and keep on printing, of course, this will be the reason why inflation always occurs.
The government is also using fiat money too much and government spending is out of control.

When too much money is circulating in the system, it will certainly have an impact on the increasing demand for goods and services which will ultimately increase price increases and inflation occurs.
There must be a serious policy to avoid hyperinflation like Zimbabwe.

Bitcoin may be a good way out, but it should be noted that the risk of high volatility in Bitcoin will remain, fast price movements will be a high enough risk for early users.
Said to be a good hedge, at this time bitcoin is certainly still not among the best, There is still Gold which is a hedge for many people.

But Bitcoin has a limited and decentralized supply, so the supply in circulation will remain or decrease and is not regulated by any government.
Before considering Bitcoin as an inflation hedge, it's a good idea to do thorough research, understand the characteristics of the crypto market, and carefully consider your risk tolerance and investment objectives.

Of course, it may happen that bitcoin will become the world currency. But so far, the dollar has taken this place and it will probably continue to do so in the near future. If the crisis hits the dollar, some other country will want to replace the dollar. For example, China, which is not in crisis now and has great potential. Governments don't allow things into the economy that they can't control. Bitcoin is such a thing.

We are in an economic crisis and are slowly coming out of it. But inflation and crisis are part of the economy and it will come back in the future, everything is cyclical and this is not the first time the world has had a crisis, inflation. Therefore, it is necessary and not wrong for us to prepare well for the future.
In the short term, I would be skeptical of bitcoin but in the long term, bitcoin is actually a better hedge against inflation than gold.

A multipolar world is a certainty in the future, but that does not mean inflation and crises will disappear. As long as the government still uses fiat money and money printing is not strictly controlled, inflation will repeat in the future even if we have BRICS.

Barring everything that had happen to us in the past, like the pandemic and the war in the Europe, it's better to think that we might be in the economic crisis already.


Actually we did experience, after the pandemic, perhaps last year, we have seen some countries really going into the brink of meltdown. We have heard BRICS for so many years though, and that they should be the next big think around the world. But so far, it has not proven anything. China though is really coming up to challenge the US and with that we should be ready and at least hedge some of our wealth into bitcoin by now.

I have convinced myself that bitcoin is the best investment asset or store of value compared to gold currently and in the long term. Bitcoin is performing well for an asset - I don't doubt it because bitcoin is being supported by the community as adoption increases. I don't know how skeptical you are about bitcoin's long-term potential - but try not to ignore the opportunity even if you can only afford to invest 10% of your overall budget in it.

If you have doubts about Bitcoin - then it's a good idea to diversify. This means that you can buy bitcoins for a certain budget amount and you can also have gold as another asset. Both of these investment assets are profitable - but you still have to consider the risks.

I think trade will be done in BTC if other alternatives prove unable and extremes like national currency does fail then its already proven BTC is of use to the common people.   To be a safe haven is more then just transacting, that suggests stability beyond other things like just buying food that keeps or anything that is more stable then the failed currency.   I think most will not look at BTC as a safe haven but for speculation and various uses mostly digital, long term I think thats the market BTC is best suited to.

I do think that is the main reason why we are using it anyways. I mean why would we want to hold bitcoin? Is it because it looks cooler? Of course not, I buy bitcoin because it is an asset that will go up and be more valuable than other assets while fiat is dropping. Some people use stocks, some people use gold and silver, some people use real estate, but many people who realize that holding fiat is a bad move, will end up doing something.

I think it doesn't make sense to cause this much trouble personally, it should be important for you to realize that it is not going to end up with a result that you may want if you keep holding bitcoin. This is why it is much better if you just get bitcoin and hold that instead of fiat.

I don't know why you are so sure there is an incoming economic crisis. What are the signs you are seeing that made you so sure?

Anyways, if there will be such economic crisis, I don't think it will be like the 2008 economic meltdown given that we are at the verge of seeing two powerful global financial system... being the status quo and the BRICS nation. If the later succeed in establishing the kind of economic cooperation they set out to achieve, it could result in a situation that a crisis in the US controlled economy might lead to an economic prosperity of the BRICS nation and vice versa. This is what I envisage in a bipolar world that is upon us already.

Not all places or countries around the globe would really be suffering such economic crisis on which there might be places which do suffer but it wont really be that 100%. Economic crashes? Its never been new and as an individual then it would really be just that wise if you had already made out yourself that prepared for whatever things that would really be happening. Bitcoin could neither be or not as your safe haven but considering that we do speak about risks then there's no exemption and its true that there's no such thing about assurance on this world on which it would really be that still have the possibilities whether it would be still existing in future
years to come or not. Speaking about saving up your @ss in terms of problems then it would really be still that depending on how much you had invested of course and not really expecting something in return if you are
really just throwing up some few bucks on your Bitcoin holding or stash. This is why its better to be realistic if you do think up this way. Yes, it does have the potential that it might last long but doesnt mean that getting
rich with small amount of investment would really be happening into. Always put up into your mind that financial stability and sustainability would really be that not something an easy state for someone to reach or
acquired. It would really be taking lots of works and considerations too.

The volatile nature of bitcoin makes it an hedge to inflation,compare to gold or land. Land and gold doesn't have the potential that bitcoin has and can't be used as an hedge to inflation. I will say Land has been there for a long time but presently most investors are using bitcoin as a store of value because they have seen it is the best hedge to inflation.

However,the profit that bitcoin will yield in 8yrs will be higher than gold of the same amount is used to invest for the same given period of time. Demand and supply is what controls bitcoin price and as time goes on as the adoption increases,so also will the price increases,and because it is limited in supply,the price of bitcoin will keep on increasing. Abear market will come and go and your bitcoin wouldn't depreciate in quantity,it remains the same. Don't use only one side to judge Bitcoin and this is why a long term investment is the best because I know that if you plan to invest on land and gold,you wouldn't sell after two years because it will be useless to make profit from it.

It is true that many people think much about bitcoin and the way they present bitcoin will make you think that bitcoin has been right from the beginning of the world and it will be till the end of the world. Nothing lasts  forever including bitcoin, but there are things that have been proven to have stayed for very long and will continue to be in the economy for very long such as the gold that you mentioned.

The topic creator talked about the upcoming economic crisis and I wanted to read where he got the information from because the economic crisis that is hitting the world especially developing countries is worse and if there is more to come, that should be hell.

Prone to crashes doesn't mean it's bad to own because Bitcoin doesn't crash forever, especially as you yourself know that Bitcoin is becoming increasingly popular with the concept of decentralization so that it is liked by many people. And this also makes Bitcoin have the potential to become the best asset in the crypto space which is very suitable as a long-term investment for everyone, although other assets such as gold and land are also not bad to own.

But you also have to understand that Land and Gold are very different assets to Bitcoin so you have to put them in a different place because they are not worthy of being compared or compared in any sector. What I see is that gold is only suitable for storing asset value in the long term because its increase tends to take a long time, while land will only increase if it is located in an area or place that is most liked by everyone. This means that not all land is the same price and expensive, because land that is difficult to reach by residents or the community at large will also be difficult to be expensive.

You had me with the first line but I don’t think gold will be a very effective hedge in a major market collapse either. The good news is that I don’t think a major crash is in the cards because banks have inflation keeping their assets afloat at the moment and that may last long enough to kick the can down the road on this whole economic crash thing.

It makes sense to use it that way because you are going to end up with a result that will profit you and a lot of people are lacking that. I believe that it will be important as we go ahead because it will definitely make a lot more people realize that fiat is not a safe place and bitcoin is a safe haven for them to keep their value.

I know that because it has crashes time to time like these ones, people are worried about it and I can understand the situation without a doubt. But that doesn't mean that we are going to end up with a bad result, the end result will be good without a doubt. That's why it's quite important to make sure that it goes as well as hoped for and could be profited with it without a doubt.

There is no safe place when a crisis occurs, many people think too much about Bitcoin, what we must understand is the concept of decentralization such as bitcoin of course also prone to drop when inflation occurs, it is better to save large amounts of assets in trusted commodities such as gold, Land and so on, and making cryptocurrencies is an alternative investment so that it does not make us panic when a bear market occurs.

I'm going to try to say yes, bitcoin is going to be an asset with potential as a safe haven of value against an economic crisis.
Bitcoin comes by providing transactions without a trusted third party and the presence of bitcoin responds to the global recession in 2008^[1].

The history of bitcoin with the global economic crisis that has occurred has made many experts who have conducted studies conclude that bitcoin is the best hedge.
As the best store of value, bitcoin's value in the long term will not decrease and great returns will be earned by those who choose the long term.
Don't look at the current price drop from 29k to 25k, but look at the price statistics from when it was first introduced to now and in the following days.

it could say that bitcoin is being used as a safe haven by many people nowadays, I even made bitcoin as my safe haven several times when the issue of inflation occurred in my country, especially since the benchmark for the value of all world currencies is USD, so the USD / BTC pair is very good to be used as a benchmark for safe haven (often professional traders and investors take advantage of the moment of inflation to take profits in the market).

the scenario that occurs is usually when inflation occurs in your country, the exchange rate of your country's currency against the USD will decrease so that to buy bitcoins you have to use more money (a moment when many people are selling bitcoins) but when the value of your country's currency strengthens against USD then you only need to spend a little money to buy bitcoin (a moment when many buy bitcoin)

In my country, our economy has been in recession for over two years now and there has been a high rate of inflation increasing rising cost of basic livelihood items and low wages and poor governmental policy from the central bank that has resulted in a weak currency value,  so in this kind of situation I think we are no longer waiting for in pending economic crisis since we over here have already been on recession for long now.
But talking on the role of Bitcoin in this kind of situation,  it point to the primary fact that Bitcoin is a saviour in economic crisis so at that,  knowing how to properly DCA makes you outstanding in using the Bitcoin economic cutting-edge formula.

OK, I believe that we're talking about different categories of crises. You're talking about the usual Boom/Bust Cycles that happen every time an economy is "over-heating" caused by too much money in circulation. What I'm talking about is a kind of financial crisis like what happened in Weimar, Germany, or to those countries that are currently suffering from hyperinflation. It's always better to be prepared and HODL some Bitcoin as a fall back than having none.

Yeah yeah!
You need to zoom in on the growth of 1000x from a few pennies to 10$ to ignore the fall from 60k to 25k!

Same as in another thread, show me the safe heaven part:

Bitcoin exploded in periods of really cheap money with interest under 1% and with inflation under 2%, for the first time in its history when it was faced with expensive money and high inflation is the moment it broke one of the rules of never going below the previous ATH and more importantly, it stopped acting independently. Bonds went up, the stock market went in red Bitcoin went in red too. But let's zoom out for others too:



Hmmm **** was 2$ in 2013 is now 200! If zooming out is the way to analyze things then *** shares are a hedge against inflation!

I said at the beginning of the crisis, not during the crisis. What I'm really worried about is that people are converting their wealth too soon into bitcoins which they consider "saev heaven", while the crisis is still just hearsay. It was suicide based on the history that I explained earlier.
On the other hand, I'm not saying bitcoin isn't a viable investment during a crisis, precisely it is a good opportunity to double wealth. The question is, could the average person think of increasing wealth under such circumstances?

As a Bitcoin HODLer, what would you advice your fellow HODLers should be holding during times of crisis? Cash/Fiat? That's probably a practical move, but that won't be a "safe haven" in my opinion, that would be a hedge to limit the drawdown from HODLing Bitcoin, the actual safe haven. Because,

In order for an investment instrument to be described as a safe haven, it must be unrelated or negatively related to other investment instruments in times of crisis or recession. Gold is an example. Its volatility is not high and it is a safe investment tool that has always been adopted by people but it is disadvantageous in terms of storage conditions and so on. Bitcoin volatility rate is at the top compared to all other investment instruments. The nature of the cryptocurrency market demands it.

Bitcoin's volatility does not prevent it from being a long-term investment tool. Bitcoin's limited supply on the contrary, decentralization and transparency, easily stored and easier international transfers from banks make Bitcoin a reliable investment tool. If your investment is in an amount that will be forgotten for you and will not be needed immediately, it may be positive to store Bitcoin in times of economic crisis but if your investment can be needed at any time, it will be useful to turn to gold where volatility is at a low level in times of crisis.

Price Volatility is the biggest concern of Bitcoin mainstream adoption. Yesterday I Price of Bitcoin was over 29k and this morning its around 26.5k, CMC says that Bitcoin went down to 25.5 before making a rebound. So yes you need to remain mentally ready that your investment may get struck for some times.

We need to balance out between Bitcoin and real world financial system like fiat. Both have there pros and cons, just don't put all your eggs in one basket.

I do not think that it would be anything like that at all. That's just way too much doom to think about at this moment and it shouldn't be really that much of a big deal at all. I understand that some people may think that it doesn't work that way but that's eventually not a big deal at all.

Just focus on how you could make a profit and that should be the important deal. Get as many bitcoins as you could afford at this moment and you are not going to face any troubles like that in the future such as no internet and all that. That would require something like maybe a nuclear war or something to happen and I do not think that such thing will happen, it would be very unlikely and should not be considered a possibility.

If there is a financial crisis you would find many investors coming into this space and the market might be rallying because of that but it is a highly risky market considering the volatility level and you cannot compare it with gold at this time (had a different view earlier but considering the price now, view changes), i would not necessary call it a safe heaven unless you were smart enough to enter at the bottom.

If I look at history, there is no investment instrument that maintains value at the beginning of the crisis. Bitcoin is also on this list, and there is no guarantee that the recovery history until it gets a new ATH will be repeated.
Ideally, you can think of any safe haven if the crisis has been going on for some time and you've convinced yourself that your survival will be fine for a potential longer crisis.

Zoom out past the period of economic crises? No ser. You zoom out to see the REAL trajectory. Because we don't have more than 50 years of data for Bitcoin, let's use,

GOLD - Zoom out to the maximum.

https://goldprice.org/gold-price-history.html

The DOW JONES AVERAGE - Zoom that out to the maximum.

https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

That's the trajectory WITH ALL the economic crises in their history. Why? Because unlimited fiat.

Plus in a philosophical level, didn't Satoshi build Bitcoin because "Chancellor on brink of second bail out for banks"?

- The network has ossified towards only 21,000,000 coins to be mined and there's unlimited fiat. BRRRRR. With Bitcoin's growing popularity, adoption, and demand, where will its trajectory be in a zoomed out chart? Down?

As far as I know, there will always be impending economic crises both real and being stirred up by the government to cause fear and panic. What you should have noticed is that the price of bitcoin is not in any way affected by these news. Infact what we are observing are people adopting digital currency as a way to save their wealth, that is a store of value. It is just like an inverse relationship where the more they talk about the "impending economic crisis" the higher the rate of people adopting bitcoin to escape from them financially and otherwise. 

Honestly, bitcoin is only suitable for investment, it is not suitable as a safe haven when its volatility is too great. We can clearly see that by what happened in 2022 or just with the news that the Fed will continue to raise interest rates immediately causing bitcoin to be dumped. A volatile asset every time news is released, it is not suitable as a safe haven for us if there is an economic crisis. If talking about assets as a safe haven, I still think that gold is still the most suitable asset.

If the economic crisis doesn't affect how our technology works... for example the internet and all its infrastructure, then of course bitcoin & all cryptocurrencies would fit in well but unfortunately not so many people are familiar with this technology, which tells me we could revert to much simpler ways of trade such as the barter system!

Btw, in a case of an economic crisis...two things might happen,  either bitcoin crashes with fiat and all other related systems or it will jump up as demand will be so high as everyone tries to get their hands on some crypto coins...so not an easy replacement if we think about  it.

I don't think so because the price of Bitcoin is very influential on the global economy and even like this year there was a deep price correction caused by an increase in currency interest rates and that had quite a big effect on Bitcoin price movements.
Likewise, when there is an economic crisis, it is clear that Bitcoin is not a safe place to take refuge.
Bitcoin price movement is so significant and fast, it's actually very dangerous.

You and I and the majority have no influence on the price of BTC and that game is far beyond our capabilities if we take into account all possible manipulations or black swan events. In such an equation, there will always be more than one X factor that you cannot predict, and that is why I say that it is not wise to throw all your cards into Bitcoin, regardless of what you think about it. It's definitely easier to be in all of this if you don't look at Bitcoin exclusively from the angle of profit, but that's obviously something that few can afford.

---

You cannot expect people to behave differently from the environment that shapes them, whether it is the media, politics or social networks, everything is in the service of almighty capital that can convince billions that a virus with a mortality rate of less than 1% will decimate humanity or that it is actually a good thing that the authorities are printing money and dropping it from helicopters.

For some, Bitcoin is a solution for everything, but at the same time, the majority have never used it to pay for any goods or services, but are waiting for halving to do its magic or for someone to invest trillions in BTC and make them rich.

Although inflation remains high and many uncertainties in the economy remain unresolved, I do not think another wave of severe economic crisis to occur. All the bad things happened in 2022, and we are getting through it step by step, things are still bad but in my opinion, it is getting a lot better than 2022.

Almost during the economic crisis of 2022, all assets are severely affected and bitcoin is no exception. But this year, bitcoin has had strong rallies while other assets remain in the doldrums, not much better.

Bitcoin is a store of value or a safe haven depending on how trustful you are with it. Because its volatility is too great and many consider it unsuitable as a safe haven.

It's been there since the pandemic has started and we're just seeing it being prolonged by a lot of factors that's happening through the global economy.

With its history, you can say that it did well. But if you're just going to look at how much it was on 2021 bull run and today, you'll be disappointed.

But look at the overview of it on its entire history and it can still be said the best performing asset, if not, one of the best.

Whether or not Bitcoin will be a safe haven during a major economic crash is the million dollar question for sure. It does appear to be breaking down in price along with the rest of the market, but it’s way too early to say definitively either way. One thing is certain though, at some point Bitcoin will be faced with a major recession and the market will have to choose up or down.

It is assumed and hoped that one day, if an economic crisis occurs, Bitcoin could act as an inflation and crisis hedge. But, in my opinion, it is just an assumption. Looking at the recent bitcoin trends, the market fluctuated with US CPI data. In 2020 when the COVID pandemic hit the world all stock markets including Bitcoin prices crashed. Yes, you can say that the ROI on BTC investment is more and you can gain profit relatively quickly, and if you have the money you can buy the dip but for an economic crisis, gold is the best option.

It's back up, that's a month old article
https://www.fxstreet.com/cryptocurrencies/news/bitcoin-and-us-stock-market-correlation-shoots-up-is-btc-at-feds-mercy-again-202308151148#:~:text=Bitcoin%20correlation%20to%20the%20US,gone%20from%20%2D0.52%20to%200.21.


But , but...all you need is buy Bitcoin!
It's proven that no matter what happens, even if an asteroid wipes all life from the Earth when the halving happens we're going to be rich!

I really don't understand why some think that crumbling economies, people out of jobs, bankruptcies, and suicides left and right would magically make all unemployed and bankrupt people pour their debts into bitcoin, and although I try every single f* time to ask these guys why do they think this will be the way things will unfold I still haven't got a single answer that is not signature quota material.


So, we need to zoom out past the period of economic crises that has set it to see the "safe haven" aspect.
Kind of....weird, let's say at least, isn't it?

Well, its history tells itself that bitcoin is somewhat of a safe haven but not totally because we know of its volatility, but when we base our decisions on history, we will know that the price keeps getting high, meaning if you put your money way back in 2016 into bitcoin, then for sure your money hasn't lost its value, even if you gain tons of profit on it. So I would probably say yes, but it is still not recommended because anytime it could be a price dump.

Yes hehehe, I was assuming that the decorrelation would become stronger and continue as the traditional markets dump. However, what might also occur is the traditional markets dump on a higher percentage compared to bitcoin and make bitcoin appear like a more stable investment. Bitcoin has been on low volatility when it is not pumping. High volatility on only arrives when there is a pump. This might be our signal that bitcoin is entering a bull market or a trigger.

Possible. I mean I don't think people who have Bitcoin would suddenly run away and trade their coins for gold (or any other asset)all of a sudden in an economic crisis since there's no connection between the local currencies and Bitcoin in the first place. People would then scramble to come and look for assets that would help them avoid the devaluation of local currencies which inevitably would lead them to Bitcoin (as one of the options that is). It is volatile however, so I guess that's one risk of it in comparison to gold.

At the very least, I don't think I see Bitcoin dropping in value in an economic crisis even if people don't buy it to avoid fiat.

There's no such thing as safe haven, specially on things that it is really that volatile and something that had been globally accepted and recognized. Speaking about economic crisis then this is something which is inevitable
even just simply speaking about that non-stop inflation which it do makes living a great challenge.I do agree on some points that having other source of income or investment is the best thing that you should
do so that you would be able to make yourself that survive if ever this one happens since you do have multiple income source.

Investing on Bitcoin is always been that a good option for you to take.Even though this one doesnt assure about success or profits in the future but we arent that blind on not to see its potential basing up
on what it had been done on the last 1 decade which we can definitely be having that kind of positivity that it would really be still having the potential to reach out new heights in the future.
This is why it isnt really that bad an option for you to take on.

This means that we are going to end up with a return that would be basically keeping its value and that's about it. This isn't really something we should be aiming at because it would be better if we could end up with a return that would be bigger.

By basic sense, what I mean is that if there is a 10% inflation in your nation and you made 10%, then you didn't made any profit at all, if your nation has 10% inflation and you made 7% then in fact you made a loss and if your nation has 10% inflation but you made 15% then you started to make some profit. That's how it's calculated and thankfully I am doing better than I expected, right now I am making more income than what the inflation has risen so I am making a profit.

Bitcoin is always the most valuable investment for the long term. In the short term, some chances can be evaluated. In many countries where the local currency is not the dollar or the euro, people have been in a very difficult situation due to both inflation and the depreciation of local currencies. Countries with the local currency of the dollar or the euro were also in trouble with inflation. It still continues this way. Especially the people of the countries in the situation I gave an example see Bitcoin as a safe haven. Many citizens of countries whose local currencies are devalued should invest in Bitcoin. They will always win in the long run.

The size of the economic crisis is also important. If there is a major crisis around the world, I can still see Bitcoin as a safe haven.

Of course there are many alternatives. You can research and learn. Everyone has their own preferences. Some argue that Bitcoin may not be safe during a crisis.

Bitcoins are almost equal to digital gold to be honest, but yes there are many things, that made Bitcoins completely different from this digital gold also. Gold or Digital gold are centralised in nature, that is they are governed or ruled by a particular body, but in the case of Bitcoins, it’s decentralised. Now regarding the value of Bitcoins during a crisis might surely come down, but as these are limited in numbers, soon the price will go up also. When price will go down, people will accumulate more Bitcoins and hence it will increase the demand of the coin.

When you invest in bitcoin, you have the consciousness that it's going to yield you massive increase and then you hold or trade, the bitcoin network being a decentralized network and bitcoin itself being volatile comes with diverse opportunities for it investors, when there's economy inflation, the fiat currency is being affected but a decentralized network does not because it works on a different and entire network, the problem currently happening is what led to the massive adoption of bitcoin over fiat because the people needed a change in financial economy, we are already feeling the impact of bitcoin and more to come.

First of all, everyone should wake up from some enchanted dream where milk and honey flow in streams, interest rates don't exist and everyone earns exactly what they need. Since the pandemic was declared, we have actually been living in an economic crisis that has been further aggravated by the war in Ukraine and all those crazy measures implemented by various countries to prevent us from experiencing a complete collapse, are slowly but surely began to return to us like a boomerang.

Bitcoin managed all this well, although we should not forget that on the day the pandemic was declared, it lost about 50% of its value, and if I'm not mistaken, gold lost about 6% - which partially answers the question posed by the OP. Accordingly, I can agree with some other members that it can be somewhat misleading to say that BTC is a "safe haven" considering the volatility, which does not necessarily have to be the result of supply and demand, but also of political decisions that go in the direction of regulations or bans on possession or trading in the same in some countries.

It would be logical to always adhere to the rule of not keeping all eggs in the same basket, which means diversifying our investments in order to reduce risk.

For some instances maybe bitcoin will be the option of people seeking for extra income since this one is well known to give profits to people who trade or invest it. But if we talk about safe haven for now it cannot happen knowing the big risk they can possibly face and maybe they can't cope up with its volatility especially if the price fall and some people cannot do any good decisions especially if they are new accumulators.

Maybe we can see a lot of hype for bitcoin as alternative when crisis occur and for sure we can see people will accumulate to anticipate for possible pump. New accumulators should make sure that they will not buy in FOMO because if the hype fades for sure they might lose their money for wrong anticipation on turns of events.

OP, zoom out Bitcoin's chart to the maximum and tell me if that isn't a safe haven. Bitcoin's volatility can be deceiving sometimes, it's a must to smoothen the chart by having a long term viewpoint. Plus if you ask me, it's Bitcoin's very volatile nature that requires us plebs to have a low time preference if you want to buy it as an investment.

In conditions of economic crisis like now Bitcoin can indeed become a safe haven asset, but it will not be so similar to gold whose price always tends to be stable in the long term. As for Bitcoin itself, it still has the potential to increase and decrease in the not so distant future, although if you want to use it as a safe haven, I think that's fine too because you can still wait for a price increase to get a better value than before through Bitcoin.

But with gold, you are just like saving money expecting value stability through assets and for predicting the value of Bitcoin myself, I personally still can't be sure whether it will drop significantly again, or even increase significantly again for certain reasons such as cycles and others.

This question has been asked 1000 times in the last 10 years. Why don't you search for older forum threads instead of creating a new one.
To be honest, I don't think that the Bitcoin price could rise in times of economic stagnation and monetary restrictions. It's historically proven that the Bitcoin price rises in times when "money machine goes brrrr....". Maybe the upcoming crisis will be more like stagflation rather than a classic recession/depression, so the central banks will keep pumping money in order to save the economy. In that case, Bitcoin could potentially serve as safe heaven. On the other hand, I don't think that Bitcoin could dethrone the classic safe heaven-gold. BTC is still more risky and volatile than gold.

Well I believe that in terms of increasing in price it will continue to do so as the cycles progress and that, although the returns will not be those of the former, the evolution of Bitcoin in fiat terms will far outstrip inflation.

What I don't see is why it should reach the masses. The masses will be reached by CBDCs and for Bitcoin to succeed as a store of value, as it already is, you don't need everyone to use it. It would simply be enough for less than half of the people who buy gold as an investment to use it, because you have to think that gold can be used as jewelry, while Bitcoin cannot. And as limited as it is, I think it is not so much a question of how many people want it as how much money the big players are willing to spend to get it.

If we consider the Covid-19 pandemic is a real test for considering any asset as a source of value and therefore it is good for diversifying the investment portfolio, or does Bitcoin perform as any other investment asset and therefore it is bad for diversifying the investment portfolio?

To have a constructive discussion, base your findings on this scientific paper called Cryptocurrencies, Diversification and the COVID-19 Pandemic by David E. Allen.

You can see the research methodology and details of the results and their analysis but I will quote:




Based on it, we can say that Bitcoin (in its current state) is not the asset that can be considered a safe haven or to diversify investment and risks when global crises occur, but this thing may change in the future.

I couldn't count how many times bitcoin has correlated and de-correlated from traditional markets since the past. Who's to say it can't correlate sometimes soon again? I wouldn't make investment decisions based on this personally.

@mk4. However, bitcoin's correlation with the more traditional markets has been going down. If this continues after every bull and bear markets, we might witness bitcoin being considered by traditional finance as an alternative investment for hedging. The interest on a spot ETF for bitcoin is clearly a sign of this. I shake my head to the doubters.

The falling correlation has been noticed since July.



Bitcoin's (BTC) fortune is no longer tied to sentiment in the U.S. stock markets.
The 90-day rolling correlation of changes in bitcoin's spot price to changes in Wall Street's tech-heavy equity index, Nasdaq, and the broader index, S&P 500, has declined to near zero. That's the lowest in two years, according to data tracked by crypto derivatives analytics firm Block Scholes.

The dwindling correlation with traditional risk assets means that crypto traders focusing solely on traditional market sentiment and macroeconomic developments may face disappointment.

Source https://www.coindesk.com/markets/2023/07/05/bitcoin-is-no-longer-correlated-to-us-stocks/

It can, but it doesn't necessarily mean that it will. There's this hope that when an actual economic crisis comes, that people would realize the importance of bitcoin. But there's also an argument to be made that the next few years might be a bit too early for bitcoin to reach the masses.

In the end, we can only hope; and only time will tell.

Potentially this could easily be a safe haven actually since as we notice the market price of Bitcoin or if we check the Bitcoin timeline we could easily see that the market price just continues an incline and continue to increase over the years, with the increasing demand of bitcoin and the huge bitcoin adaptation around the world we could easily expect that the market price is going to huge in the coming years, I mean it just the nature of Bitcoin or how it was structure with just 21 million supply and the increasing demand this is probably going to be a huge safe haven actually, I mean one thing is the inflation, with just investing our money on cryptocurrency or bitcoin we could potentially bypass the inflation which is already a big problem around the globe.

It might be similar to gold that holds a value, I mean it was already compared to a lot of gold or even called digital called in the past years, but still, this cryptocurrency or Bitcoin is still a new thing and possibly be the future so there was no guaranteed that Bitcoin is going to hold its value on the economic crisis. I mean last time when there are news about war the market price drop a huge percentage so possible it could be the case in the future as well.

Why not.
In times of economic hyperinflation, I think most of us as investors may indeed seek alternative assets like Bitcoin as a hedge against the potential devaluation of their local currencies.  Bitcoin's decentralized and limited supply nature could be attractive to those who are concerned about traditional monetary systems and their potential vulnerabilities which are capable as a safe haven investment.

So IMO, Bitcoin has the potential to offer certain benefits and attributes that could be valuable during an economic crisis, but it's not a guaranteed solution if there's an upcoming economic crisis.

I would say that you shouldnt really be only focused with Bitcoin but rather it would really be always that best or ideal that you should be finding several or a couple of sources of income so that

if ever that economic crisis would happen then you would really be able to make yourself that sustain because you do able to earn still some income which it isnt really just limited on your day job.
Im aint saying that Bitcoin isnt a solution but rather it is one of the solutions but it wont really be that enough i would say considering that we do need to spend up on day to day for us to live.
This is why it would be always that ideal or wise on having that multiple source rather than on focusing on a single point.

There's no such thing about safe haven but on the time that you would be able to have that multiple source then whatever the things happen around then you would
really be that confident since you could really be able to sustain and survive on such situation or condition.

The economic crisis I hope it doesn't get bad to the extent of destroying the entire value of local currency, especially the most commonly used global exchange currency (the US Dollar), as it will have a great impact on the price of Bitcoin. If the value reduces significantly, the price of Bitcoin might likely pump up so high that it matches the current dollar value.

Those who are afraid of inflation, which the economic crisis might cause, and have access to Bitcoin will likely covert or exchange most of their assets into Bitcoin in order to escape what's to come. But not everyone will see Bitcoin as a safe heaven no matter the circumstances of the economy, as they still highly believe in their monetary system and how it is being run, and such people will likely want to trust their assets with what they don't believe in.

Check bitcoin price history from 2012 to 2016, from 2016 to 2020 and from 2020 to today's price. You will noticed that bitcoin is a store of value. If you have bitcoin, there is chances that you will gain than if you have gold which is another benefit of holding bitcoin. But bitcoin is a highly volatile asset, that still make some people not to see bitcoin as a store of value, but if you hold it in long term, it is a store of value.

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?