As of recent, Bitcoin is being enlisted as a Safe Haven asset, declared Chris Reinersten, Rhythm Technologies Marketing Officer. During the times of rising global uncertainties, investors protect their funds using the Safe Haven assets to avoid risky assets such as stocks. However, the U.S treasures, Gold and the Swiss Franc are considered a Safe Haven asset.
Also of Recent for the Bitcoin
In previous weeks, the U.S-China trade war has increased the global uncertainties, by prompting the need for the described scenario, Reinertsen declared “China’s yuan is devalued to an 11-year low against the dollar” he stated. Capital flight is recorded across the board into the safe-haven assets this period and that includes Bitcoin.
Economic Uncertainty Fuels Capital Flight
For the past few years, as observed Bitcoin trend is becoming more and more systematically related to additional macro positions while the increasing economic uncertainty prevails worldwide.
The OpenLTV CEO, Krill Bensonoff also expressing the same opinion “accepting Bitcoin as a Safe Haven similar to Gold” declared Bensonoff. “As the systemic relativity is not proved, while Bitcoin recovers. Soon, it is expected to have an additional capital flight to Bitcoin”.
However, most people don’t agree with the purchase of Bitcoin as an alternative to yuan’s devaluation against the dollar being a futuristic investment strategy. The founder of Relex Capital, Keith Hilden agrees with this scenario. He holds the opinion that the current appreciation in Bitcoin value to a certain extent is as a result of speculation, while markets determine its equilibrium position. The recent devaluation by China’s PBoC has also shown the willingness to act to normalize external economic pressures impacting its economy, although the tremors of such a forex position were observed in the equity and currency markets worldwide-although not happening now with the expectation of the effect soon he stated. “The potential of the economy being used up as a result of the market trying to recover back to equilibrium is not controlled, but lost to speculation with additional damage done to the economy, during series of action while achieving stability once more”.
Taking no notice at this time of expert views, result-oriented investors ought to be very careful before depositing their funds into a valuable asset such as Bitcoin, which has very large volatility.