In times of turmoil, is Bitcoin really a safe-haven asset?

[figmentofmyass]

When saything price crash, people are still unconsiously using fiat money as a standard to measure value, this is the major reason that bitcoin can not become a safe-haven asset

Now some people even say that the machine that makes surgical masks has become the money printing machine, means that medical supplies has become the safe-haven asset, but they still use fiat money to measure value

So I think the key is to let people to use bitcoin to measure value, that will make quite big difference, otherwise, always a slave of fiat currency

people still have overwhelming confidence in fiat currencies. this confidence was temporarily shaken in 2008 but liquidity injections managed to sustain the system.

it's gonna take something drastic like a full blown USD default to break that confidence and change the current paradigm. when that finally happens (could be decades from now), assets like gold and bitcoin could become units of account, which would reinforce them as stores of value.

until that day comes..... Recession Rule #1: Cash Is King

[1714689394]

1714689394

[1714689394]

1714689394

[HardFacts]

people still have overwhelming confidence in fiat currencies. this confidence was temporarily shaken in 2008 but liquidity injections managed to sustain the system.

You are right, but also WRONG in your conclusion.

Confidence in FIAT is starting to get shaken NOW, hence the market crash, money printing, etc. etc.  Markets are just starting to figure it out, and the result is a CRASH in the price of Bitcoin since the crisis started.  You think the price is gone down a lot now, wait until the economic crash gets even worse, there is no limit to how far the price of BitCoin can go.   The LIE of BitCoin being " Digital Gold " and a safe haven asset is OVER...  People and the market are selling BitCoin like crazy, hence the price drop, and it is just getting started.

Hard Facts

[Abiky]

When saything price crash, people are still unconsiously using fiat money as a standard to measure value, this is the major reason that bitcoin can not become a safe-haven asset

Now some people even say that the machine that makes surgical masks has become the money printing machine, means that medical supplies has become the safe-haven asset, but they still use fiat money to measure value

So I think the key is to let people to use bitcoin to measure value, that will make quite big difference, otherwise, always a slave of fiat currency

Exactly. As long as Bitcoin is measured against Fiat, it'll never be able to achieve independency from the existent monetary system. By design, Bitcoin is deflationary so it's meant to be used as a store of value. But in a world where people are focused on the money than anything else, selling Bitcoin for Fiat has been the usual trend since it became traded on exchanges worldwide. It's no secret that the number of merchants and businesses accepting Fiat are far greater than those who accept Bitcoin as payment. In a world of chaos, people will simply resort to using what's widely accepted in the mainstream world. It's clear that Fiat is the true winner when it comes to sending/receiving payments in times of need. Physical cash proves to be convenient for emergency situations like the ones we're experiencing right now.

Despite this, the crypto market is still small compared to other markets on the mainstream world. The small liquidity, lack of regulation, among other factors negatively affect Bitcoin's price across the market once undesired events happen worldwide. The pioneer cryptocurrency is still in its infancy so it may take quite a long time before we'll be able to see people using it as a "safe-haven" asset in the mainstream world. Sooner or later, the banking system might collapse leading many people towards decentralized finance. It's the way of the future, where people can put their trust on a system backed by mathematics and cryptography instead of a central authority prone to corruption, fraud, and instability. But ultimately, time will tell us what lies ahead for Bitcoin as people either use it as a store of value or all the other way around.

people still have overwhelming confidence in fiat currencies. this confidence was temporarily shaken in 2008 but liquidity injections managed to sustain the system.

it's gonna take something drastic like a full blown USD default to break that confidence and change the current paradigm. when that finally happens (could be decades from now), assets like gold and bitcoin could become units of account, which would reinforce them as stores of value.

until that day comes..... Recession Rule #1: Cash Is King

Agree. We should give Bitcoin some time, as it's still not mature enough for mainstream use. The crypto market is still small compared to other markets, as the space is still at an ever-growing rate. Once the traditional banking system collapses (the Fed), you could expect people to use Bitcoin and even Gold more thoroughly as a store of value. As long as people trust Fiat more than anything else, I don't see Bitcoin or other cryptocurrencies going anywhere. We all know that crypto provides more benefits than Fiat itself. While prices are still volatile, I believe the market will stabilize once it's able to achieve ample regulation (and greater liquidity) worldwide.

Despite the dip in price, Bitcoin has still managed to retain its value after all these years. It hasn't gone to zero, so that's a good sign. With the upcoming halving event, it's expected that people would buy more BTC than they'll ever sell across the market. But no one can ultimately predict what Bitcoin's price will be in the future. Hopefully, Bitcoin would prove to be a great safe-haven asset as more people become aware of it over time. Just my thoughts

[squatter]

When saything price crash, people are still unconsiously using fiat money as a standard to measure value, this is the major reason that bitcoin can not become a safe-haven asset

Now some people even say that the machine that makes surgical masks has become the money printing machine, means that medical supplies has become the safe-haven asset, but they still use fiat money to measure value

So I think the key is to let people to use bitcoin to measure value, that will make quite big difference, otherwise, always a slave of fiat currency

Exactly. As long as Bitcoin is measured against Fiat, it'll never be able to achieve independency from the existent monetary system.

To overcome this phenomenon, Bitcoin would need to become the global unit of account, much like the dollar is today. This goes beyond just the abandonment of fiat currencies.

Imagine if fiat currencies are abandoned and people return to using gold and gold-backed notes as their primary unit of account. In that situation, I think bitcoins would at best occupy the same space that gold already occupies in relation to fiat today.

Bitcoins would be treated like any other commodity: When economic turmoil strikes, speculators would sell them for safe haven assets like gold, gold-backed notes, and government bonds whose credit rating would be linked to gold reserves.

[Argoo]

I've seen how mainstream events like the coronavirus "COVID-19" and the downfall of the stock market, has negatively impacted Bitcoin's price across the crypto market. For a cryptocurrency that's been hailed as a safe-haven against traditional Fiat, it's been doing otherwise. Gold has been performing better than Bitcoin and other cryptocurrencies combined. It's odd to see something like this happening today since Bitcoin is a decentralized cryptocurrency. This should make it "immune" from real-world events whatsoever. Bitcoin's latest decline in price has shown us that the cryptocurrency is still linked to mainstream events. It's probably because Bitcoin is often traded on centralized exchanges than decentralized ones. As long as it stays that way, Bitcoin will never be able to become a "safe-haven" asset in times of turmoil. Or am I wrong?

What are your thoughts?

The current situation is different from the classical one, in which Bitcoin should prove to be a reliable refuge from inflation. To prepare for protection against the spread of coronavirus, people urgently needed money, and bitcoin and other cryptocurrencies are not yet ready for direct use as a means of payment. Therefore, cryptocurrency was sold through exchanges and its price fell. This is evidenced by the current empty shelves in many stores.
If a global economic crisis sets in, the situation will be different. Production, the global economy and prices for ordinary currencies will fall. In this case, it will be logical if people fleeing inflation will invest in cryptocurrency. Stable coins will not help here, because even without falling in price, they will automatically lose value due to inflation of the usual currencies that they are provided with. In this situation, investing in cryptocurrency is a good way out and it will grow in value.

[Abiky]

To overcome this phenomenon, Bitcoin would need to become the global unit of account, much like the dollar is today. This goes beyond just the abandonment of fiat currencies.

Imagine if fiat currencies are abandoned and people return to using gold and gold-backed notes as their primary unit of account. In that situation, I think bitcoins would at best occupy the same space that gold already occupies in relation to fiat today.

Bitcoins would be treated like any other commodity: When economic turmoil strikes, speculators would sell them for safe haven assets like gold, gold-backed notes, and government bonds whose credit rating would be linked to gold reserves.

Exactly. There's no other way around. Bitcoin needs to be the reserve currency of the world, in order for people to use it as a global unit of account. I know that's very unlikely to happen anytime soon since Bitcoin is decentralized. It's not issued by any government or central authority, which explains why many people still trust Fiat today. Considering that the USD has been the reserve currency of the world for a very long time, most people tend to trust it more than anything else for their everyday transactions. The only way Bitcoin will be used in times of turmoil as a safe-haven asset is if the entire banking system collapses. As you've said before, Bitcoin will be treated just like gold, when Fiat loses its value. But it will take a long time before this happens.

Nonetheless, I hope that Bitcoin would be used more as a store of value in the future as people recognize its benefits on top of Fiat. The pioneer cryptocurrency needs to solve some issues first (mostly scalability) in order to become used as an alternative to Gold or existing Fiat. The volatility issue is linked to the crypto market's small liquidity (compared to other traditional markets) and lack of regulation in the space. Once that's solved, money will start pouring in Bitcoin and other cryptocurrencies across the market. By then, Bitcoin will become a true safe-haven asset that will gather the likes of institutional investors, average individuals, and businesses alike. After all, Satoshi designed Bitcoin to be an alternative to the existing monetary system. Sooner or later, Bitcoin will be used more thoroughly when undesired events happen in the mainstream world as people put their faith on mathematics and cryptography instead of corrupt governments and financial institutions. Just my thoughts

[Abiky]

I completely agree with you.
At the point in time everyone is liquidating their funds to survive. Most people don't care about investing and holding cryptocurrency at the moment,  since the pandemic condition can not ascertained.

Exactly. This is probably because most merchants and businesses worldwide accept Fiat than crypto. We all know that Bitcoin is not merchant-friendly because of its slow transaction speeds, high fees, and most of all, unstable prices across the market. As long as people measure Bitcoin's value relative to Fiat, it cannot be used seriously as a safe-haven asset in times of turmoil. Rest assured that once the world's economy collapses, people will resort to an alternative system that's free from the likes of central banks and governments worldwide. This is where Bitcoin and other cryptocurrencies come into play, as they eliminate the middleman out of play.

With only 21 million Bitcoins that will ever be mined, there's more than enough reason for it to be widely compared as Gold. The number of people using Bitcoin is still low compared to those using Fiat. As governments print more money in order to "maintain the economy", inflation will rise like never before. After that, people will lose trust in the banking system paving the way for widespread usage of Bitcoin in the mainstream world. Until then, we'll continue to see people cashing out everything for Fiat in order to survive in this life-threatening situation. Just my opinion

[HardFacts]

With only 21 million Bitcoins that will ever be mined, there's more than enough reason for it to be widely compared as Gold.

UTTER STUPIDITY...

There is a LOT more than limited supply needed to give something value, limited supply itself means NOTHING.    Only 1000  " Hard Facts Coins " have ever been mined, so are they worth trillions each  

BitCoin grew up in a bubble where virtually everything went up.  This is BitCoins first economic crisis, and the price has CRASHED, it is down by 66 % since its all time high, how is that limited supply thing working out ?   BitCoin price is heading down again as I post, you should be very worried....

$ 6,263.21

-7.80%

[jhonjhon]

yes I think events that occur in the world will always have an impact on crypto, it is caused by us as its users who always have a panic about the security of assets that we have when the world is having a little problem and it causes a sudden decline in the market.

In a thing like this, you can't think about holding but rather to sell and buy back again once it stops. To think that people should not lose their appetite seeing their investment drops, I don't think so and I know everyone wants to save some rather than lose it all.
To be in real talk, Bitcoin investment is not to be considered as a safe-haven coz any time of the day you can possibly lose. That is why called it a high risk investment unlike local investment.

[fiulpro]

Safe heaven asset -
NO !

I don't think that anything is a safe heaven now , this is worse than a inflation and deflation and even worse than a financial crisis , nothing out there is something that can actually stand in the middle of all this .

The government is not able to control this and people who have recovered have started testing positive again.

The economy is dying , people are there without jobs , families are suffering .

This is just like the great recession but much worse if not controlled . Trust me in the upcoming days it is only going to get worse .

[Wind_FURY]

With only 21 million Bitcoins that will ever be mined, there's more than enough reason for it to be widely compared as Gold.

UTTER STUPIDITY...

There is a LOT more than limited supply needed to give something value, limited supply itself means NOTHING.    

You're right, which reinforces the the FACT that there are MORE reasons why Bitcoin is very valuable.

Only 1000  " Hard Facts Coins " have ever been mined, so are they worth trillions each  

That's a stupid debate. HardFact-shitcoins are not Bitcoins.

BitCoin grew up in a bubble where virtually everything went up.

It WAS a natural Ponzi, LIKE Gold, BUT developed its own circular economy.

This is BitCoins first economic crisis, and the price has CRASHED, it is down by 66 % since its all time high, how is that limited supply thing working out ?  

BitCoin price is heading down again as I post, you should be very worried....

$ 6,263.21

-7.80%

Zoom out. Do you like the view?

[johnyj]

With only 21 million Bitcoins that will ever be mined, there's more than enough reason for it to be widely compared as Gold.

UTTER STUPIDITY...

There is a LOT more than limited supply needed to give something value, limited supply itself means NOTHING.    Only 1000  " Hard Facts Coins " have ever been mined, so are they worth trillions each 

BitCoin grew up in a bubble where virtually everything went up.  This is BitCoins first economic crisis, and the price has CRASHED, it is down by 66 % since its all time high, how is that limited supply thing working out ?   BitCoin price is heading down again as I post, you should be very worried....

$ 6,263.21

-7.80%

This kind of volatility is totally normal on bitcoin, you can not expect hundreds of times of value increase without such scale of withdraw. But the concern that bitcoins grew only because of economy bubble is interesting

Bitcoin has not really experienced any major economy crisis since it was born, and this time it is actually performed quite well: Given the scale that crash on S&P and Oil, bitcoin should have crashed more than 99.9% by now if it is correlated to normal financial market, since its volatility is usually 5-10 times bigger than them. But it did not, clearly says that it is either independent of the economy crash or it is highly resistent

But for its price to rise, we need some other mechanism or consensus, so that when in panic, a lot of fiat money are going to buy bitcoin without the slightest hesitation.

(Edit) In fact I prefer a smart contract kind of design, where smart contract automatically buy bitcoin based on the scale of economy crash or the scale of QE. The only question is how to get the QE liquidity into cryptocurrency market, or you just create them out of thin air as well like USDT. I feel that the people with the access of QE money have the possibility to do this but their motivation might be a question

Exactly. As long as Bitcoin is measured against Fiat, it'll never be able to achieve independency from the existent monetary system.

To overcome this phenomenon, Bitcoin would need to become the global unit of account, much like the dollar is today. This goes beyond just the abandonment of fiat currencies.

Imagine if fiat currencies are abandoned and people return to using gold and gold-backed notes as their primary unit of account. In that situation, I think bitcoins would at best occupy the same space that gold already occupies in relation to fiat today.

Bitcoins would be treated like any other commodity: When economic turmoil strikes, speculators would sell them for safe haven assets like gold, gold-backed notes, and government bonds whose credit rating would be linked to gold reserves.

Besides that fiat money religion is everywhere, I also don't think it is a good idea to make bitcoin a standard unit of account, since the production cost (mining cost) rises too fast. The cost basically decided the value of a coin, and if a coin's value rises very fast, and you use it as unit of account, everything's price (counted by bitcoin) will drop so dramatically that merchants simply have no way to make a profit

The unit of account should be stable, and can not be created out of thin air (against debt). So I promote to use energy unit like Jole or KWH as unit of account. Since everything's production eventually goes back to the use of energy, it can be a very stable and object measure of value

By using energy as unit of account, there will be different view of value. For example, currently when a barrel of oil price crashed from $40 to $20, and people use USD to measure value, they will call oil price crashed. But if you use energy as the unit of account, a barrel of oil always contains same amount of energy, so it is just the USD suddenly get more valuable

[Wind_FURY]

People who call Bitcoin a "cult/religion", are people who want you to part from your Bitcoin, or they're big-blocker-shit-coiner-trolls who want you to part from your Bitcoin.

[boltz]

For now people prefer to keep their savings into cash and furthermore I have a lot of friends who panicked due to Corona and sold a nice amount if cryptos as they fear the lockdown will be much longer than we know for now. In my country we just entry the second level of military security as people are still going out side like nothing is happening. So ask yourself, is bitcoin a safe-heaving in this hard times ? I say no, its just another currency that cannot provide ( FOR NOW ) all the things like buying food and stuff in order to survive.

[HardFacts]

For now people prefer to keep their savings into cash and furthermore I have a lot of friends who panicked due to Corona and sold a nice amount if cryptos as they fear the lockdown will be much longer than we know for now. In my country we just entry the second level of military security as people are still going out side like nothing is happening. So ask yourself, is bitcoin a safe-heaving in this hard times ? I say no, its just another currency that cannot provide ( FOR NOW ) all the things like buying food and stuff in order to survive.

VERY GOOD RATIONAL thought on this subject !!!

The ECONOMIC CRISIS will be much worse, and last much longer than the Corona Virus.   This will NOT end when people can go outside and do as normal, the economic damage will last MANY, MANY years.  Which is why I expect even more people will need their money and sell BitCoin and other cryptos.     My analysis:  Given the way BitCoin reacted to its first economic crisis, I think it is going down to near zero.

Hard Facts

[verita1]

I think BTCitcoin needs more time to demonstrate its full potential. This is a chaotic time Coronavirus has shaken many economies. We should only expect the cryptographic market behavior in the following days. The time we are living is atypical.

[squatter]

Besides that fiat money religion is everywhere, I also don't think it is a good idea to make bitcoin a standard unit of account, since the production cost (mining cost) rises too fast.

That's probably just because we are in an exponential growth period, the "early adopter" phase. Miners are heavily speculating about future adoption and value. I don't think this will always be true.

Once mainstream adoption has already occurred, Bitcoin loses most of its speculative value, which is replaced with fundamental network value. This should lead to much more stable prices that are more closely tied to actual mining revenue.

[Sadlife]

I guess you haven't taken a look at Gold and Bitcoin's price comparison, if ever the stock markets goes down then Bitcoin and Gold will follow because they're correlated.
The reason for why Bitcoin is also declining is because in the initial stages of the crisis everybody got rekt so their cashing out any assets even if in profits. Because they need to survive and cover their losses.
If this crisis gets more severe people will start to look for assets to store their money.

[ChiBitCTy]

This raises a very good question and these times are really the first chance that we've gotten to really see if bitcoin holds up as a "safe haven asset".  So far from what we've seen up to this point is that bitcoin really isn't the "safe haven" asset that so many hoped or wished that it was.  Over the last month bitcoin is down around 32%.  The Dow Jones, S&P 500 and the Nasdaq are all down around the 30% area.  Therefore bitcoin fell right in line with the U.S. stock markets which have been tanking. 

If anything I would say that gold has held up to be the true "safe haven" asset that it's always had the reputation of being.  Gold was even surging during the beginning of this whole ordeal. Gold right now sits at spot price of $1,625.  It's important to note this is physical gold numbers, as equity gold positions (ETFs for example) tend to shift with the markets much more so that than physical metal.

[acarli]

This raises a very good question and these times are really the first chance that we've gotten to really see if bitcoin holds up as a "safe haven asset".  So far from what we've seen up to this point is that bitcoin really isn't the "safe haven" asset that so many hoped or wished that it was.  Over the last month bitcoin is down around 32%.  The Dow Jones, S&P 500 and the Nasdaq are all down around the 30% area.  Therefore bitcoin fell right in line with the U.S. stock markets which have been tanking. 

I agree. I was hoping that it would perform better during this crisis. The world needs a sae-haven store of value. Maybe if BTC holds close to what it is not when USD has inflation, then maybe , slowly it will be considered a safe haven. fingers crossed.