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

[kryptqnick]

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.

I disagree with that premise--bitcoin might technically be a currency, but in practice it's treated much more so as an investment, just like stocks and gold are.  People aren't buying bitcoin in order to spend it, and in times of crisis that would be foolhardy. 

I would even argue that had Bitcoin been centralized, it could avoid the current price fall since there's no reason for it to go down which is not the same with other things people trade that is tied to physical things that suffer due to restrictions. However, I believe that Bitcoin can recover from this, and perhaps it won't even take that much time. Over the last hour, according to Coingecko, Bitcoin is up 7.5%. (okay, down to 6.7% already). Surely, it's still extremely low, and people did not expect that. An example of how unexpected this is can be a predictions thread due to a giveaway by Bitcasino where we had to predict today's price: https://bitcointalk.org/index.php?topic=5229828.0.

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[Cnut237]

I posted about this in another thread. Simply, bitcoin has the potential to be a safe-haven asset, but isn't at the moment...

Well, one takeaway is that bitcoin is not seen as a safe haven or a store of value.

I think we all knew that anyway, but here is some further evidence. Far from being uncorrelated or even negatively correlated to traditional assets, bitcoin is positively correlated. People don't rush to bitcoin in times of trouble. Instead people buy bitcoin when the normal markets are surging and confidence is high and people are more willing to take risks... because that is how bitcoin is perceived in the wider market, as a risky gamble, not a safe haven.

But we are still in the early days. Bitcoin, as has been explained many times, is in theory the perfect store of value, decentralised and deflationary. That's the theory. In practice, the crypto markets and young and immature, volumes are low compared to traditional markets, there is little to no regulation... the whole crypto arena is ripe for speculation and manipulation, which leads to volatility, which leads to more volatility, etc etc.

Remember we are just partway along the road; we are  a long way from an end state. Crypto is the Wild West, but it will mature and bitcoin will indeed become a safe haven... because it is so much better than the alternatives.

To my mind, a key indicator of how far along that road to 'safe-haven' status we are will be how bitcoin reacts once the panic dies down and the recovery starts.

[LogitechMouse]

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.

Yes Bitcoin is a decentralized cryptocurrency but it's price is still base on the technical and fundamental analysis and right now, the fundamentals already affected it. We saw the price decline of it few days ago.

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?

It is and it will never be a safe haven asset. We saw already that Bitcoin is also affected with the current events right now. Bitcoin isn't a safe haven because we saw how it moves already. It went from $9k to below $5k in just a few days so how will it be a safe haven. If there is a safe haven asset, I think gold would be the one.

The COVID-19 has spread worldwide and it has created mass hysteria to most of the investors right now forcing them to sell some of their assets at a loss. This virus will just stop affecting the market if the mainstream media will stop hyping it.

[LorenoCoin]

but seems the lowest point has passed, now its on the way back

I think that it is not must to go ahead to take actions yet, it is better to wait a bit for the market to stabilize to trade, the COVID-19 has just declared a global pandemic, we must not forget it.

In my opinion, it is best to buy bitcoin little by little to see how it performs and accumulate everything you can, when people make nervous sales it is the best time to invest.

[hahay]

Basically I agree about "safe-haven" assets and don't think that the COVID-19 incident will really affect any market in the world, or maybe the collapse of the bitcoin market because of a process for the bullish market after the halving event and honestly, I still hesitant to say about the collapse of the bitcoin market because of the impact of the corona virus because everything happens simultaneously when chaos continues to increase in many sectors in the world because of this corona virus outbreak.

[Maestro75]

Depends on the 'type'. nCoV is one type, Venezuela is another.

Bitcoin did not even drop this hard within days during Venezuela crisis. There is too much fear and worry with Corona. The world is crumbling under the weight of the virus.

[isaac_clarke22]

Basically I agree about "safe-haven" assets and don't think that the COVID-19 incident will really affect any market in the world, or maybe the collapse of the bitcoin market because of a process for the bullish market after the halving event and honestly, I still hesitant to say about the collapse of the bitcoin market because of the impact of the corona virus because everything happens simultaneously when chaos continues to increase in many sectors in the world because of this corona virus outbreak.

To see the the COVID-19 being declared as pandemic, it does seem like to have a significant effect to it. What's the other thing that we could think of the cause of this crash?
However on the brighter side, Bitcoin landed almost the same crash last year except that it was below 4k before so we can still think the conclusion that the Corona Virus effect to Bitcoin is still just a coincidence although we can expect that many are panicking in other countries now.

[posi]

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.

Cryptocurrency does have the capacity of been safe haven against traditional fiat but not against conflicts, pandemics and war which could lead to panic sell their holdings.

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?

Bitcoin decentralization doesnt mean bitcoin will be bulletproof to pandemics and a single whale which choose to save his holding by swapping it for stablecoin could cause the current dump. However, bitcoin is still somehow linked to mainstream events because it uses the internet and it exchange activities are total execute by exchange team which might be living in the region where the COVID 19 is high so the dump in price is normal.

[Ozero]

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.

Cryptocurrency does have the capacity of been safe haven against traditional fiat but not against conflicts, pandemics and war which could lead to panic sell their holdings.

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?

Bitcoin decentralization doesnt mean bitcoin will be bulletproof to pandemics and a single whale which choose to save his holding by swapping it for stablecoin could cause the current dump. However, bitcoin is still somehow linked to mainstream events because it uses the internet and it exchange activities are total execute by exchange team which might be living in the region where the COVID 19 is high so the dump in price is normal.

Yes, one whale, as was the case with Mr. Gox previously, having thrown into the market several batches of eight thousand bitcoins, can completely collapse the cryptocurrency market. Where does the "safe haven" go? At the same time, can such a drop occur in the gold market, even considering that the amount of gold entering the market will be approximately equal in value to the value of bitcoins then exposed? It is unlikely that the gold market in a similar situation will fall as much as with cryptocurrency.

[XCANA]

Basically Bitcoin being a volatile coin will make it not be seen as a safe haven because its dropped far more than other stocks in the market. Like gold and oil dropped and Bitcoin which was to be a safe haven dropped even worst than them. This was as a result if bitcoin volatility. We have seen is: Bitcoin isn't immune to turmoil or crisis most especially when it has to be a global thing. We'll got it wrong when we said it is immutable, though the global effect of sell off affected Bitcoin because of it volatility which we all know from the beginning. Bitcoin isnt a safe haven as it proof itself during the covid-19.

[Kelvinid]

You certainly find it different of course when there is a crisis just like we have now. But talking about crypto as a safe haven, you can't expect to be like that coz even before we know how volatile it is. This is enough that people would like to say that only invest crypto that we can afford to lose. And for that statement alone we, therefore, conclude that safety assurance and guaranteed gains are not at 100%. This is the risk we face before then and this is also a thing we are able to face again and again in the future.

[Becky666]

Depends on the 'type'. nCoV is one type, Venezuela is another.

•••••••••••• There is too much fear and worry with Corona. The world is crumbling under the weight of the virus.

Absolutely correct, fear contributed to the dip in price of Bitcoin and other cryptocurrency, we all know that, with Bitcoin volatility, it won't be able to stand against turmoil or epidemy. The global shift in financial institutions will at the end shift to digital currency and holders will reap the fruit of holding for long-term. The effect of this coronavirus will cause a global recession which will engulf the whole world, then maybe as the time goes Bitcoin can be a safe haven.

[pixie85]

Bitcoin is a decentralized cryptocurrency. This should make it "immune" from real-world events whatsoever.

The stock arket was crashing so much that they shut down and did not allow people to trade anymore. This made it seem that the stocks did not crash so much but they would if not for the external influence.

You can see how traditional markets work. They decide when you're allowed to sell or not. You're just a sheep to them.

Bitcoin is only as decentralized as the Internet. If they shut down the Internet what will you do? That's what people who sell are afraid of. The total shutdown!
Have you noticed that the biggest crash happened after Trump said that the US will close its borders?

[camito]

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?

I think probably the reason why Fiat or gold has even become a main way of buying goods is because of its easy access. Though, we can say that Bitcoin and any other cyrptocurrency is easy to be used for transaction because it is digital, still, many people are not aware and unsure of its existence. Traditional family or standard families would still rely on Fiat to buy goods for the lockdown system. Bitcoin still remains a decentralized currency, people thinks its an investment and asset rather as something they can use everyday especially for this kind of situation. It is still a safe haven, and its quantity, quality, and price depends on the user - on how and when will he use it. It may experience this decline but let's not ignore the fact that from the very start, it is volatile. No one controls it, no one is sure of when will its demand will go down or up. Moreover, the finality here is that, the fear will cause and subject you to be realistic. If I think that it is unsafe and I might be scammed if I use Bitcoin, wouldn't I just rely on my savings account or paper money in my wallet?

[Abiky]

I disagree with that premise--bitcoin might technically be a currency, but in practice it's treated much more so as an investment, just like stocks and gold are.  People aren't buying bitcoin in order to spend it, and in times of crisis that would be foolhardy. 

Look at what's happening right now; this coronavirus panic is causing people to go to a very safe (for the short-term) asset--cash.  People are expecting this outbreak to cause quarantines and everything else that comes along with epidemics, so cash is useful for stocking up on food and supplies and consequently people are selling their investments.  Plus once a huge drop happens in the stock market (or the crypto market), it causes even more selling due to the fear of losing even more money. 

There's no way bitcoin is a safe-haven asset even in the best of times, and I say that based on its volatility alone.  And it's turning out to be even worse in a crisis.  I haven't done the math, but bitcoin has dropped something like $4k in the past month or two.  You tell me if that's an asset that people are going to flock to because they're scared.

Unfortunately, that's the harsh truth Bitcoin is facing today. It's more like a store of value than a real currency like the ones we know and love today (Fiat). Just like Gold, people tend to sell their Bitcoin in order to obtain cash for daily purchases. After all, Fiat is widely accepted among merchants and businesses worldwide than the pioneer cryptocurrency. Considering that Bitcoin is a highly-volatile cryptocurrency, it can never be a safe-haven asset that's good to use in times of turmoil. Negative events in the mainstream world will affect Bitcoin's prices in a bad way just like it's the case with stocks today.

While Bitcoin proponents have often claimed the cryptocurrency to be a safe-haven asset, yesterday it has proved them wrong. At least, 1 Bitcoin = 1 Bitcoin no matter what. In terms of Fiat, one would have to deal with the dreaded volatility until the market gains more liquidity. With ample regulations from governments worldwide, I'm sure the crypto market will mature like never before. As it's said in the real world, "Don't put all your Eggs in One Basket". Diversification is necessary if we want to survive unexpected situations in the mainstream world like the recent case of the coronavirus pandemic which has affected the worldwide economy. Just my thoughts

[Python Master]

It's probably because Bitcoin is often traded on centralized exchanges than decentralized ones.

What are your thoughts?

I disagree with this. Bitcoin price is not affect by where it is traded. Bitcoin price is determined by traders ( market) and traders are always hypersensitivity with news, by that way price will be affected by news.
Gold has been a standard store of value for thousands of years and it is recognized worldwide. Meanwhile no country claim that Bitcoin is a currency. Until now Bitcoin is just an asset and its value is not stable. We can see and we saw that Bitcoin price can be shock by a rumor, a fake news, or a speak of Warren 

[bgaf]

Unfortunately, that's the harsh truth Bitcoin is facing today. It's more like a store of value than a real currency like the ones we know and love today (Fiat). Just like Gold, people tend to sell their Bitcoin in order to obtain cash for daily purchases.

Yeah nothing we can do about mindset of people about bitcoin. Even though many users have adopted it, they just seen bitcoin as store of value, nothing more nothing less, some say this will replace other currency but the truth is people only using it for financial purposes such as trading. How often does bitcoin uses on establishment? Few times, just because to show how cryptocurrency is booming. But with a fixef supply has disadvantage since most people thinking is to hold it since its value can increase later on. So its not being used or utilized like what fiat and currency has been used for.

[FaithInCrypto]

I don't consider Bitcoin as a safe-haven asset as I am aware that any issues regarding the world will definitely shake its position in the market. I only consider Bitcoin as an investment so I choose to hold on to it as much as I can. I am not sure if it is because of COVID-19 or other things that manipulates it but I do know that it is connected to the economic situation we are in so everything is in a decline.

[meanwords]

To be honest, it depends on the current situation. In the event that a certain fiat currency is to go down, then yeah Bitcoin would be a safe place to invest your money in. But when this kind of event where food, medicine, and necessary supplies are more important then money, then fiat money would be your best bet. The decline of Bitcoin might be because of the current event where supplies and medicine are more important so it is pretty logical that everything is going down this month.

[johnyj]

To be honest, it depends on the current situation. In the event that a certain fiat currency is to go down, then yeah Bitcoin would be a safe place to invest your money in. But when this kind of event where food, medicine, and necessary supplies are more important then money, then fiat money would be your best bet. The decline of Bitcoin might be because of the current event where supplies and medicine are more important so it is pretty logical that everything is going down this month.

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