Bitcoin Forum

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,

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.

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.

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.

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.

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!

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.

Well I think there is as proposed by Investopedia : https://www.investopedia.com/terms/s/safe-haven.asp


Some of the suggested Safe Haven Asset are:

1. Gold
2. Treasury Bills
3. Defensive Stocks
and surprisingly
4. Cash.

And I agree that Bitcoin is considered as one of those Bad Safe Haven Asset because of the reason given by OP.


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.

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.

People should really know this thing since from the start.Safe haven? theres no such thing in investment world even if we do deal with stocks .. etc.

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.

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%

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.

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.

The first one is an X for me already :D. 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.

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.

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.

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 .

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.

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.

^ The last part of the sentence is the answer to your question.
If you notice that the bitcoin price was increased even in the middle of the pandemic crisis. Technically, there is no correlation between the pandemic and the cryptocurrency price. Nevertheless, bitcoin was not created for safe haven, we know that it is a highly volatile asset that traders make a profit. Bitcoin is useful for trading and for payment methods. If you invest this and treated like a bar of gold or other valuable stone, you , just know how bitcoin works. Moreover, there is no safe haven asset.

Bad safe haven? I think it was overly acted on it. Maybe it was enough to say not a safe haven asset as it really it was.

With this kind of volatility, you can't either think about safe but just wondering why a lot of people come into crypto? Have they care about the risk and NOT a safe haven? Pretty sure they are not that much but they are looking the opportunity inside. It is something to find risk in all kind of investment, may we consider crypto investment is riskier than the others but that be considerable enough to manage.

Bitcoin might not be a "safe haven" asset right now, but it is becoming one.  Those who have the forsight to see that will reap great rewards.

Saying all that, you can say that it's wrong just because of the volatility. Maybe people are looking for something a more stable thing like gold, but you cannot correlate it to that because it's a different thing, and people have different views on it. Anyways, it could be dependent as well with the perspective of a person because they believe in that kind of investment. Think about it.

Your terms of safe haven are

• Low Volatility | Definitely not in cryptomarkets
• The market surges, the value must increase | Happens in cryptomarkets

With your ending statement

You were unclear on what you are trying to say, and it seems like you are for Bitcoin is a safe haven because of the trading volume it produces. So what are you talking about?

Bitcoin is a Bad Safe Haven Asset

What is this? It sounds incoherent to me.

So are you primarily saying that Bitcoin is a safe haven asset? However, as a safe haven asset, it is bad. Is that what you are saying?

I cannot see the logic with it. If it is bad and it does not meet the requirements of a safe haven, then it is definitely not a safe haven at all.

Or is it? But a bad one. LOL!

If you want to invest safely is investing in using gold or your money to buy land/house. Gold is very different from cryptocurrencies because the price is always stable. But if you decide to invest in crypto, you should also be prepared to bear the risk. Crypto is very easy to change because it is influenced by global news. It really promises to invest in crypto.

Prices increase so fast but prices can also go down quickly. So that makes investing in cryptocurrencies have a risk. But if you want to invest in the long run, I think you will benefit in the future. And I will invest in Bitcoin and Ethereum.

So which one among the two asset class you mentioned is a better safe heaven then, is it supposedly the stock that got racked with bitcoin (cryptocurrency) during the market meltdown and couldn't rise back up or bitcoin that went down but has surpassed it's previous highs before the pandemic?

When it comes to picking an asset as a safe heaven I think it basically depends on personal opinion, are you looking for an asset that won't or unlikely to depreciate that much in price when the market get affected or the asset that'll be the most likely to bring you high profit when the market conditions are favorable for growth?.

Personally, I will go with growth in profit instead of security in regards to stable price like Gold.

When the coronavirus pandemic suddenly appeared, there was no financial crisis. People urgently needed cash and to a large extent they began to sell cryptocurrency. How Bitcoin and other cryptocurrencies will behave during the current global economic crisis, we will soon see when it, most likely, comes after the victory over the coronavirus, or even during it, if such a fight drags on. It is expected that when a real global economic crisis sets in, in this case the cryptocurrency will have to prove itself as a reliable refuge from inflation.
Stable coins cannot be a safe haven during the economic crisis and inflation of ordinary currencies, since they are the same currencies of states, only in digitized form. When the regular currency becomes cheaper during inflation, the stable coin with which it is provided also automatically falls. At the same time, this is not noticeable at the rate of a stable coin, since its price remains equal to the price of this ordinary currency.

First and foremost, I don't think I agree with you on the above statement. You need to understand that the crypto market has always be volatile and that has also been its unique feature. Secondly, how well have you been monitoring the crypto market in terms of the market value of Bitcoin during this pandemic ? Comparing the rate at which the price of Bitcoin has dropped during this pandemic and that of the previous price drops, we can all testify that Bitcoin has been quite stable during this period. I think you don't really understand what a safe haven is.  You should try and gain enough knowledge on the entire cryptourrency portfolio before concluding based on the little knowledge.  

Your comment is filled with assumptions. Remember that facts are sacrosanct and anything devoid of it is doubtful. Where are the facts of the argument you put up here? Well, while you go on arguing this, a lot of people won't even be bothered. Monies are exchanging hands and people are smiling all the way to the bank. For me, at least, the recent happenings are proving that Bitcoin is a better store of value than fiat at this time. Fiats all the world are crashing but Bitcoin is still holding its ground.

There is no such terms like "bad safe haven asset" or "good safe haven asset" or "perfect safe haven asset". Any asset can be safe haven if it has certain characteristics on the present time or the past time, while we are talking about it, because we can't foresee the future. What we can do is analyzing the past behavior. Does it mean that a particular asset will behave in the same way it did in the past? Most probably yes, but this will still be guessing game with a high probability to win. Gold is a safe haven asset except it wasn't when executive order 6102 was made, for example. Bitcoin is also safe haven asset, because it is similar to gold except no one can take away it from you. Everything is relative, under some circumstances which are unknown in advance it can either become a safe haven asset or lose its role to be it.

Price and volatility shouldn't be the only characteristics of "an asset" to be considered as a "safe haven" in my opinion. Venezuala had their "safe haven" in gold held by a London bank, and the bank won't give it back to them. Not your vault, not your gold.

As a safe haven, I will go for GOLD. Bitcoin can only a good for a short-term investment, once you manipulate it properly depending on its season, then you can get a huge profit out of it. But think about the future, Gold are really the store of value compared to other assets that you can hold.

Bitcoin is volatile in the market, while Gold only increase its price depending on the time. Although they are both limited and non-renewable, still bitcoin is dependent on the market situation while Gold is dependent on the time. During times like this, you can invest in bitcoin so that you will know the difference between the two as a safe have asset.

Not every safe haven asset has all of the characteristics that describe "ideal" safe haven asset. According to https://www.ig.com/us/trading-strategies/what-are-safe-haven-assets-and-how-do-you-trade-them--181031 an ideal asset should has following characteristics to be considered safe haven:


Bitcoin currently has 4 out of 5 characteristics and can be considered safe. What it doesn't have yet is "certainty of demand", that is why bitcoin is volatile, meaning that its price fluctuates i.e. price is still being discovered.

Those who trust in bitcoin during its downfall will really benefit its value when its high peak season occurs.

Bitcoin is really not a good store of value compared to other assets right now, there are a lot of factors that could have triggered its volatility. Some people are scared to hold bitcoin because of the pandemic that is happening right now. Soon, I believe that bitcoin will become the best safe haven asset, it has the ability to improve and increase its price just like gold, agricultural land, and etc.

It will probably make those bitcoin investors profitable enough in 10 - 20 years, if you are a bitcoin holder, just continue to manipulate it and huge profits will approach us.

People will free to choose bitcoin and altcoin as their safe haven asset or investment, and there is no force to use bitcoin and altcoin to save your money as an asset in the cryptocurrency. If you really want to have a safe haven asset, you can choose gold and save it in your deposit box because the gold price is not too fluctuate than bitcoin and altcoin.

But people who involve in the cryptocurrency for a long time will still invest in bitcoin because they believe that bitcoin will be rise high, and the price will be increased so high in the future. People would like to buy more bitcoin if the price is down because that means they can have more bitcoin in their wallet, so they can sell it once the price goes back to the higher rate.

So that depends on yourself, whether to use bitcoin and altcoin or gold as your safe haven asset, and you should know the risk for investing in the crypto and gold.

I don't think the dollar can't be called as a safe haven asset as well. As you can see now, the dollar price has been decreasing slowly after the ongoing racism problem. Yeah, I agree for the user who called bitcoin is a currency like dollar and etc, so its price can be followed with the traditional investment place like stock and etc. This is why when the coronavirus came, bitcoin price even all crypto currency prices were decreasing.

There is just one can be called a safe haven asset and that is gold. During the crisis came, a gold price just increases and has done an opposite with the other investment place. Indeed, you are not safe if you choose crypto currency as a way to store all your fund, there is some risks that will be faced. You may need to choose gold to store your fund if the crisis comes.

Yes, stable coins are a safe haven asset choice that is quite stable for investment. Stable coins are assets whose value is based on the value of physical objects whose prices are stable such as gold, commodities or the United States dollar. The stable value of coins is very low unlike other cryptocurrency.

Bitcoin is always a safe investment and even now you can blindly invest in bitcoins now and see the results in 2 years. This does not mean that alts are also safe heavon. Alts and crypto other than bitcoin is a risky investment. 

You can say Bitcoin is a bad safe haven or a good currency which is not a safe haven. In any case, Bitcoin did not do terribly bad. While initially the price dropped spectacularly, within a couple of months Bitcoin recovered to its pre-quarantine price. And it's the best performing asset of 2020 so far if you think of it as an asset. So while it's not a great solution to every problem, it might be the best humanity currently has available.Bitcoin is also a risky investment, even if not as risky as altcoins. There's no way of telling that the price in 2 years won't be worse than it is right now. If you take June and take it 2 years back at a time, it's been always the case that the price has been growing, but there's no guarantee the trend will continue and ever since the drop of the price in 2018 it's been volatile but very rarely breaking the $11k barrier.

This is kinda debatable.  It is worst for those who invested way back 2017 (during the peak of the Bitcoin hype)  and best to those who invested on early 2019.  Bitcoin due to its high volatility can be said as not a good choice as Safe Haven Asset, a long term investment probably but not as Safe Haven so to speak because its real price is yet to be discovered as said of one of the early replies.

Safe haven or not I think it depends on how investors themselves expose bitcoin and of course about its security, because when compared with the assets mentioned it is indeed different because most of their safe haven assets are managed by existing institutions. Despite a recessionary shock, this crypto asset will still be strong because even recovery can happen quickly.

OP doesn't mean to call it a bad but meant unsafe haven asset. Which to some extent is true considering it's volatility.
I love bitcoin and is bullish about it. But still I don't have all of my savings on bitcoin. It's not that I don't trust bitcoin, but I'm afraid of the volatility as I might need to get it cashed out before I intend to. Stable coins should have been safer but the problems within them is not bringing the feeling of safety from the inside.

A safe haven should be something that you can rely on during the time of great need e.g during the pandemic crisis, btc was seriously down in price while fiat was able to sustain people through this crisis, in fact, people where more in need of cash to provide sustainance during this period than btc, even now there is still a huge need of fiat,   people need jobs to earn money (fiat) to provide for their families,
So from this perspective, I do not think btc can serve as a safe heaven or served as a safe haven during this period which was suppose to be the testing period for btc and how well it can serve as safe haven in a time of crisis.

So you problem is that you are not able to spend bitcoin in stores for your daily needs, there are many stores in the US and Europe that accepts bitcoin and if you are particular about spending your money in bitcoin then you are able to do so as many retail stores and restaurants are accepting major cryptocurrencies. If your country does not have that many stores accepting them it will get accepted eventually. If your investment in bitcoin is because you think as a safe heaven then it is a completely different story.

For now I don't think it is wise to call btc a safe heaven, the price alone is very unstable, how you can purchase something with x amount and few days it goes down below that amount and you consider it a safe heaven?

If many people consider btc as safe heaven then why many people will cash out to FIAT or some stable coins!  They should leave it as it is, safe heaven should be stable, btc is not, you can only gain profit with btc but not consider it as safe heavn.

It seems to me that this is all temporary and the future is definitely with digital assets, but whether Bitcoin specifically will become one, of course the question is. Although I personally - believe

Bitcoin is not a bad safe-haven asset. It all depends on the skill of investing in it and the strategy of patiently preserving it. Bitcoin is certainly not an asset in a stable safe haven like gold but it is a trade asset. Each type of asset has its own characteristics and because of this, there are differences between these assets. Bitcoin is a relatively volatile asset and if you can't invest in it properly and at the right time, it must not be considered a safe haven for you. So in my opinion Bitcoin may be considered a safe asset for you if you decide to make a long term investment but if you use it for trading, it is not a safe haven asset like gold and other assets.

Op,this topic has been discussed so many times.I don't see a reason why we should repeat the same thing over and over.Nobody is saying that cryptocurrencies are a good safe heaven.Maybe only some crypto trading newbies are thinking that Bitcoin and altcoins might be a safe heaven.Anyway,according to some statistics,Bitcoin is outperforming gold and stocks as the most profitable asset for 2019,as far as I remember.
So Bitcoin isn't a safe heaven,but it's a pretty good asset to put your money in.

If there are not so many stores that accept Bitcoin the solution might be Bitcoin debit card. I have one for a long time, it works perfect and I don't have to think if the merchant acceptc Bitcoin or not.
Another thing, when you take into consideration risks and volatility that are part of Bitcoin I don't know how anyone can think that it's a safe heaven.

If bitcoin is used for daily trade or short-term investment it is certainly very bad as a safe haven. Because bitcoin prices are volatile
making it a high risk for short-term investment. But if bitcoin's long-term investment is very good as a safe haven asset, proven bitcoin
prices in 2009 compared to 2020 is very good if used as a long-term investment. Even in my opinion if compared to gold, bitcoin is still
far better for long-term investment.

That, according to their "definition". I believe we need another point of reference.

As Bitcoiners, or people trying to look for a "safe haven", the separation of money and state ethos in the Bitcoin community, and Bitcoin having the properties to support this ethos within, is sufficient.

if its bad for short term then you shouldnt have to include the word safe haven with it but you can just termed it bad investment right away  .

being risky means it applies on both short and long term   .  you can use the volatile effect of btc to earn on shorter terms so i dont consider it as a disadvantage  but i dont know about you   .   if you have no balls then just stick on long term investment as that is less risky    .

Bad safe heaven? I guess OP is among those cryto newbie who always buy high and expect the price of bitcoin to go high after buying, bitcoin hits an all time high of $10000+ during the last 3-4 months of the pandemic, if you had bought around $4k that's a nice return regardless of the volatility, just buy and hold bitcoin till next year this time (post halving) and will understand what I'm trying to say

Was BTC created to be a safe haven? I do not think so.
To get profit from cryptocurrency, one must know the exact timing when to enter and when to exit. If it's too late to enter or exit the market so that it loses, then it's a risk.

Don't look at this with a narrow perspective, let alone just refer to the pandemic lately. But try to look at it from a broader perspective, going back ten years ago, even though the decline occurred during the pandemic, it still has a fantastic price compared to ten years ago, right?

Bitcoin BTC could perhaps the best performing class of investment this decade. That being said, we cannot deny that it could potentially be a safe haven.

However bacause of these factors, it might be reason to cause as bad investment for some; first, bitcoin derivatives were introduced to the market of bitcoin like Bakkt, ETF, GrayScale and etc. Investors here are stocks oriented so during COVID 19 when economy falls in comparison to other stocks and indexes, it is expected that Bitcoin will react the same way.

Second, impact of bitcoin small market caps -swing price are present in the market in the condition that it could spell market being easily prone by any manipulations,

and third, "adoption", simply the way we think and everyones ideal in this forum, use-case and scarcity could mean more market intervention.

If only this mentioned lacking and disadvantages may improved; I think, bitcoin is entirely investors' financial haven.

Take  a look only Bitcoin and other cryptos compare to any form of financial instrument - as an asset class - could be classified into the market in its inherent characteristic and that is being scarce in real system. Safe haven is also seen in larger scale which mean 20 to 40 years in counting from now :D ;D

Bitcoin is a digital currency, it is 21 million supply only when supply is slow demand is increasing. Bitcoin is gold safe haven assest. Future payment currency, it is also world no.1 currency.

Maybe he confuses with the bitcoin price is always change every day, so he says that bitcoin is a bad safe-haven asset. I think he needs to search for more information related to bitcoin and about investing itself. If he wants to use something as his investment, he needs to have knowledge and information before using his money to buy the asset. He doesn't need to buy at a high price if he has the knowledge because we can buy bitcoin at a low price and hold it for a while. By doing that, I am sure that he will not think that bitcoin is a bad safe-haven asset.

You're right I think they lack enough knowledge about Bitcoin so they are calling Bitcoin bad They never talk about this when they know about bitcoin investing Bitcoin is at the top of the crypto market Bitcoin is no longer a lucrative currency. The price of other currencies increases depending on Bitcoin Bitcoin is very good for the future and the demand of the crypto market is increasing for bitcoin It is possible to achieve double profit in long term investment but we have to wait patiently for that.

I really don´t understand why it has t be a fight of Bitcoin vs. e.g. gold. If you build a healthy portfolio with an appropriate risk management you can easily add both to your account. Never put all eggs in one basket, and that also means Bitcoin doesn´t even need to be a safe haven, but a perceived valuable asset that people can trust.