Is BTC a safe haven? No, but not far away
Author: Laughing Rock
The stock market was miserable, and even the entire global market was in a period of turmoil, and Bitcoin’s scenery alone was a good spurt. So the idea that Bitcoin is a safe-haven asset has become popular again. Bitcoin has a limited amount of natural resources and is easy to store. It is similar to gold, so Bitcoin has the reputation of “digital gold” . But with the recent callback of Bitcoin, the stock market is still falling, while the gold of the safe haven has been rising, and bitcoin is not a safe-haven asset and has been controversial.
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Definition of safe haven assets
Safe-haven assets refer to a relatively stable type of assets that do not fluctuate too much as the market changes , such as gold, dollars, and so on. Common safe-haven assets are dollars, gold, and Swiss francs, yen, etc., which are often overlooked.
Global risk events have increased, and products that purchase safe-haven properties have generally become the first reflection of investors. The main attraction of safe -haven assets lies in risk aversion. The so-called "going to buy gold in troubled times" actually makes sense. The sluggish global economic recovery, global monetary easing, global stock market sluggishness and endless geopolitical risk events have all created demand for safe-haven assets.
Bitcoin is a risky asset, not a safe haven
The price of Bitcoin fluctuates greatly. You should have a deep understanding of the currency, and the benefits and risks are much higher than all other financial assets. For example, if you have stocks in your portfolio and you are adding bitcoin, do you think Bitcoin can reduce the overall risk of your portfolio? Obviously not.
In fact, Bitcoin and the stock market are highly correlated. A report by the World Gold Council shows that the relevant index of Bitcoin and Nasdaq is 0.69, which is “highly positively correlated”, and the correlation index with gold is -0.73. "Highly anti-correlation." The report concludes that under market pressure, cryptocurrency is not suitable as a safe haven.
It can be seen that the performance of Bitcoin is highly correlated with risk assets and highly correlated with the gold of the safe haven, so Bitcoin is a risky asset with high risk and high return.
Looking at it from another angle, if you look at the current currency circle, which person is not with a hundredfold and a thousand times of speculative mentality, it is doomed that bitcoin is in the speculative tide, and investors are bound to face huge risks. You think that the people in the currency circle are investing in bitcoin because of risk aversion, all for the rich. In order to hedge the risk of investing in bitcoin, even if it is a fool.
Bitcoin is expected to become a safe haven
Bitcoin is still in a serious speculative tide, but it is undeniable that Bitcoin itself has the characteristics of safe-haven assets, but it now shows a strong risk asset characteristics. When talking about safe-haven assets, you have to talk about gold. Let's compare gold and bitcoin to see why Bitcoin is expected to be a safe-haven asset.
Gold is the key to safe-haven assets
1. Value comes from the Millennium Consensus
For thousands of years, gold has been a symbol of wealth in any country or region. You can sell money when you dig a piece of gold. But gold is also useless in nature. Don't say anything about gold jewelry. If gold is a dime, you see who else wears it. The intrinsic value of gold is definitely not a decoration, but it is derived from the belief that gold can raise prices and can maintain value. This is the so-called consensus.
2, rare, and stable
The total gold storage on the earth is very small compared to other metals, and the rarity is high. Most importantly, gold is very stable, will not be oxidized, and can be preserved all the time.
Comparing Bitcoin, Bitcoin itself is virtual. In fact, there is no actual use value. All the values are given by people. It comes from people's consensus. The only difference is that gold is real and bitcoin is virtual. In terms of rarity, Bitcoin is also available and cannot be artificially modified. In terms of stability, Bitcoin can be said to be the safest and most stable network system in the world because of its decentralized design.
Defects of gold as a safe haven
1, gold is easy to fake
After years of research, the mining company found that the density of metal tungsten is almost the same as that of gold . Therefore, a batch of tungsten blocks was specially ordered, and then a layer of real gold was plated on the surface of the tungsten block. A batch of gold contained only about 35%. The standard 5000g gold brick was born. The existing precious metal detector can only identify the precious metal surface components, and the inside is that the machine is powerless. It can be imagined that an ordinary person buys a piece of gold brick, and there is no ability to identify the authenticity of gold at all.
You can go to Baidu, how arrogant the gold fraud is before, the text is inconvenient.
2, holding gold is not safe
I don't even say that I send a picture to see the key points in the circle and I will experience it myself.
Compared to Bitcoin, no one can mix a bitcoin into the network out of thin air unless it is double-flowered. The most important point is that Bitcoin truly realizes the inviolability of private property. Just remember the private key and you are integrated with Bitcoin . No one can take it away from your hands.
to sum up
Bitcoin has far more advantages than gold as a safe-haven asset, but bitcoin is still a niche market, and there is no huge consensus like gold. After giving it financial attributes, it became a tool for speculation, and the attributes of safe-haven assets were concealed and became high-risk assets. But with the growing bitcoin consensus, Bitcoin has replaced gold as the best quality safe-haven asset just around the corner.
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