Bitcoin (white) and gold (yellow) price chart from Dec. 1 to March 13. Source:\u00a0<\/em>Bitcoin Counter Flow<\/em><\/p>\n<\/figcaption><\/figure>\n \u201cI have never thought of BTC as a \u2018safe haven,\u2019\u201d Paul Schatz, founder and president of Heritage Capital, a financial advisory firm, told Cointelegraph. \u201cThe magnitude of the moves in BTC are just too great to be put in the haven category although I do believe investors can and should have an allocation to the asset class in general.\u201d<\/p>\n \u201cBitcoin is still a speculative instrument for me, not a safe haven,\u201d Jochen Stanzl, Chief Market Analyst at CMC Markets (Germany), told Cointelegraph. \u201cA safe haven investment like gold has an intrinsic value that will never be zero. Bitcoin can go down 80% in major corrections. I wouldn\u2019t expect that from gold.\u201d<\/p>\n Crypto, including Bitcoin, \u201chas never been a \u2018safe haven play\u2019 in my opinion,\u201d Buvaneshwaran Venugopal, assistant professor in the department of finance at the University of Central Florida, told Cointelegraph.<\/p>\n But things aren\u2019t always as clear as they first appear, especially when it comes to cryptocurrencies.\u00a0<\/p>\n Related:\u00a0<\/strong><\/em>Bitcoin dominance hits new highs, alts fade: Research<\/strong><\/em><\/p>\n One could argue that there are different kinds of safe havens: one for geopolitical events like wars, pandemics, and economic recessions, and another for strictly financial events like bank collapses or a weakening dollar, for instance.\u00a0<\/p>\n The perception of Bitcoin may be changing. Its inclusion in exchange-traded funds issued by major asset managers like BlackRock and Fidelity in 2024 widened its ownership base, but it may also have changed its \u201cnarrative.\u201d<\/p>\n It is now more widely seen as a speculative or \u201crisk on\u201d asset like a technology stock.<\/p>\n \u201cBitcoin, and crypto as a whole, have become highly correlated with risky assets and they often move inversely to safe-haven assets, like gold,\u201d Adam Kobeissi, editor-in-chief of the Kobeissi Letter, told Cointelegraph.\u00a0<\/p>\n There\u2019s a lot of uncertainty where BTC is heading, he continued, amid \u201cmore institutional involvement and leverage,\u201d and there\u2019s also been a \u201cnarrative shift from Bitcoin being viewed as \u2018digital gold\u2019 to a more speculative asset.\u201d\u00a0\u00a0\u00a0<\/p>\n One might think that its acceptance by traditional finance giants like BlackRock and Fidelity would make Bitcoin\u2019s future more secure, which would boost the safe haven narrative — but that\u2019s not necessarily the case, according to Venugopal:<\/p>\n \u201cBig companies piling into BTC does not mean it has become safer. In fact, it means BTC is becoming more like any other asset that institutional investors tend to invest in.\u201d<\/p><\/blockquote>\n It will be more subject to the usual trading and draw-down strategies that institutional investors use, Venugopal continued. \u201cIf anything, BTC is now more\u00a0<\/em>correlated to risky assets in the market.\u201d\u00a0<\/p>\n Few deny that Bitcoin and other cryptocurrencies are still subject to big price swings, further propelled recently by growing retail\u00a0<\/em>adoption of crypto, particularly from the memecoin craze, \u201cone of the largest crypto-onboarding events in history,\u201d Kobeissi noted. But perhaps that is the wrong thing to focus on.<\/p>\n \u201cSafe havens are always longer-term assets, which means that short-term volatility is not a factor in that characteristic,\u201d Noelle Acheson, author of the Crypto is Macro Now newsletter, told Cointelegraph.\u00a0<\/p>\n The big question is whether BTC can hold its value longer-term against fiat currencies, and it\u2019s been able to do that. \u201cThe numbers bear out its validity \u2013 on just about any four-year timeframe, BTC has outperformed gold and US equities,\u201d said Acheson, adding:<\/p>\n \u201cBTC has always had two key narratives: it is a short-term risk asset, sensitive to liquidity expectations and overall sentiment. It is also a longer-term store of value. It can be both, as we are seeing.\u201d<\/p><\/blockquote>\n Another possibility is that Bitcoin could be a safe haven against some happenings but not others.\u00a0<\/p>\n \u201cI see Bitcoin as a hedge against issues in TradFi,\u201d like the downturn that followed the collapse of the Silicon Valley Bank and Signature Bank two years ago, and \u201cUS Treasury risks,\u201d Geoff Kendrick, global head of digital assets research at Standard Chartered told Cointelegraph. But for some geopolitical events, Bitcoin might still trade as a risk asset, he said.<\/p>\n Related:\u00a0<\/strong><\/em>Is altseason dead? Bitcoin ETFs rewrite crypto investment playbook<\/strong><\/em><\/p>\n Gold can serve as a hedge against geopolitical issues, like trade wars, while both Bitcoin and gold are hedges against inflation. \u201cSo both are useful hedges in a portfolio,\u201d Kendrick added.<\/p>\n Others, including Ark Investment\u2019s Cathie Wood,\u00a0agree that Bitcoin acted as a safe haven\u00a0during the SVB and Signature bank runs in March 2023. When SVB collapsed on March 10, 2023, Bitcoin\u2019s price was around $20,200, according to CoinGecko. It stood close to $27,400 a week later, roughly 35% higher.<\/p>\n BTC price fell on March 10 before bouncing back a week later. Source: CoinGecko<\/em><\/p>\n<\/figcaption><\/figure>\n Schatz doesn\u2019t see Bitcoin as a hedge against inflation. The events of 2022, when FTX and other crypto firms collapsed and the crypto winter began, \u201cdamages that thesis dramatically.\u201d\u00a0<\/p>\n Maybe it\u2019s a hedge against the US dollar and Treasury bonds? \u201cThat\u2019s possible, but those scenarios are pretty dark to think about,\u201d Schatz added.<\/p>\n Kobeissi agreed that short-term fluctuations in asset classes \u201coften have minimal relevance over a long-term time period.\u201d Many of Bitcoin\u2019s fundamentals remain positive despite the current drawdown: a pro-crypto US government, the announcement of a US Bitcoin Reserve, and a surge in crypto adoption.\u00a0<\/p>\n The big question for market players is: \u201cWhat is the next major catalyst for the run to continue?\u201d Kobeissi told Cointelegraph. \u201cThis is why markets are pulling back and consolidating: it\u2019s a search for the next major catalyst.\u201d<\/p>\n \u201cEver since macro investors started seeing BTC as a high-volatility, liquidity-sensitive risk asset, it has behaved like one,\u201d added Acheson. Moreover, \u201cit is almost always short-term traders that set the last price, and if they\u2019re rotating out of risk assets, we will see BTC weakness.\u201d<\/p>\n Markets are struggling in general. There\u2019s \u201cthe specter of renewed inflation and an economic slowdown weighing heavy on expectations\u201d that are also affecting Bitcoin\u2019s price. Acheson further noted:<\/p>\n \u201cGiven this outlook, and BTC\u2019s dual nature of risk asset and long-term safe haven, I\u2019m surprised it\u2019s not falling further.\u201d\u00a0\u00a0<\/p><\/blockquote>\n Venugopal, for his part, says Bitcoin hasn\u2019t been a short-term hedge or safe haven since 2017. As for the long-term argument that Bitcoin is digital gold because of its 21 million BTC supply cap, that only works \u201cif a large fraction of investors collectively expect Bitcoin to increase in value over time,\u201d and \u201cthis may or may not be true.\u201d<\/p>\n *********************************<\/p>\n If one of the paying programs on our Monitor appeals to you, please support EmilyNews<\/em> by registering for it on our website. Thanks very very much!<\/p>\n EN web Support Chat<\/strong> | Hyips and Crypto questions \u2013 HyipChatEN<\/a><\/strong><\/p>\n Telegram Chat for Crypto and Hyip reports: @HyipChatEN<\/a><\/strong><\/p>\n *********************************<\/p>\n Be the first to get most important HYIP news everyday! If you like this article and want to support EN \u2013 please share it by using at least few of social media buttons below. Thanks and See you tomorrow!<\/p>\nWas Bitcoin ever a safe haven?<\/h2>\n
Bitcoin\u2019s dual nature<\/h2>\n
No time for over-reaction<\/h2>\n
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