Bitcoin Bull Run Alert: Italy to Begin Banking Bail-In
Bitcoin has proven a few things true over its relatively short existence in human history. One, it has proven that it is not going anywhere, regardless of how many times the mainstream media pushes it into the cornfields. Two, the inherent value of Bitcoin’s currency and underlying technology are so strong and undeniable that the world’s largest nations, banks, and corporations are building their future business models around it. Thirdly, Bitcoin is the world’s newest financial “safe haven,” as market turmoil means great gains can be made in the world of digital currency like Bitcoin.
This truth may come into play once again, as the year comes to a close. Reports out of Italy indicate another European Union member nation is beginning to implode, and a banking “bail-in,” or “debt conversion” are starting in earnest. Is another Bitcoin “bull-run” in the offing?
https://cointelegraph.com/news/bitcoin-bull-run-alert-italy-to-begin-banking-bail-inI can agree to the first two propositions, but remain partly skeptical regarding the third one - at least regarding a direct causal short term relationship between "market turmoil" and gains in Bitcoin fiat valuation. This theory was first established after an increase in Bitcoin price occurred at the same time as the Cypriot expropriation event. However all data we have are pure correlations, which do not allow to draw the conclusion that it was in fact immediate safe haven demand that led to Bitcoin's price increase. Personally I doubt it, because:
1) Compared to traditional safe havens like precious metals, Bitcoin is not yet well established;
2) buying the currency involves some effort and technological knowledge to store it safely and hence is time-consuming.
However I do agree that Bitcoin works as a safe haven and inflation hedge in the medium and long term.
Overall I doubt that an Italian default will lead to significant price increases via capital flight. If there will be a short term effect, it will be primarily speculation-based.
ya.ya.yo!