Is Bitcoin truly a safe-haven asset?

[yurgee]

Bitcoin evangelist has always attributed Bitcoin to be a safe-haven asset, while extreme fanatics believe that Bitcoin is far better than gold. Bitcoin was born in the wake of the 2008 financial crash as a libertarian currency and as an instrument that could help cushion the event of a future financial crisis.

Since Bitcoin is purely a speculative risk asset, many people have doubted its position as a purported safe-haven asset, I am not one of them anyways. However, since Bitcoin hasn't witnessed a global recession yet, I feel Bitcoin hasn't sufficiently defended its narrative as a safe-haven asset.

As the possibility of a global recession intensifies, what's your take on the possible performance of Bitcoin? will it go down with the traditional market or will it defend its name? I am very much interested to know.

[mk4]

A slightly hot take: it's probably not a safe-haven(not a good one, at least) asset right now, but it could be a great one some time in the future.

Why? Because I think it's really safe to assume that people aren't really even holding Bitcoin as a safe-haven asset or as a "hedge" in the first place. Most people hold it right now solely for speculative reasons.

Yes, it could perform really horribly in the next global recession, and I really wouldn't be surprised. But it doesn't mean it will perform horribly in every single global recession forever. Bitcoin, in it's current state, simply lacks the liquidity and lacks enough people that at least primarily hold it as a safe-haven asset.

In the end, time will tell. And tell you what, if bitcoin actually did perform greatly and not drop along with the S&P500? Oh boy. 🚀

[Yaunfitda]

I don't think there's really a asset that we can call safe-haven to begin with. There is gold, but it also had some ups and downs. As for bitcoin, really depends on how you look at it, of course bitcoin maximalist and fanatics are going to preach how it will be a good hedge in this pandemic. But you have to understand how volatile it is, the risk involved, supply-and-demand scenario, etc. So it's really hard to answer your questions.

[rezakurnia66]

Bitcoin is a cryptocurrency that is not managed by banks and agencies. So it has a high risk if investing. Yes, maybe Bitcoin is more likely to be compared to gold, but in terms of the advantages that Bitcoin has gained superior. Crypto assets are very volatile, Bitcoin can increase rapidly as in 2017, reaching the price of US $20,000. So if you're asking about secure assets? Bitcoin assets are unsafe. This investment is at risk and you should be smart to become a trader, although at risk is able to make a big profit.

To me that in the year 2017, Bitcoin could reach its peak. So I'm sure if Bitcoin can return to its peak in the future.

[gentlemand]

It's dependent on your definition of a safe haven. If we're talking one's investment value then that's a big nope for me and anyone hawking that view is suspect. Anything could happen still. There's nowhere near enough track record to come to that conclusion.

If we're talking about shielding your wealth from seizure and being able to transport it across borders unmolested then as a literal safe haven there's nothing else like it.

[Assface16678]

If you can see there are a lot of people and news stating that the bitcoin today is one of the safest heavens to storing your funds because today because of the pandemic outbreak which is the virus some of the economies of the country fall down rapidly and some of them are not enough to make a full recovery and now some of them does want to make an investment but the problem is they don't have enough information and not good to make an investment into fiat currency instead they make an investment to the bitcoin because it is easier to make a profit on it just make a good investment when the market falls down and wait for a long time investment to increase the market price and now you will get your profit easily.

In the fiat currency today it is not good because some of the countries fall down and the movement of the money is not too volatile and falls down.

[zenthereum]

...while extreme fanatics believe that Bitcoin is far better than gold. Bitcoin was born in the wake of the 2008 financial crash as a libertarian currency and as an instrument that could help cushion the event of a future financial crisis.

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

Gold has no intrinsic value. The price is what people believe it should have. I remember a no-coiner proclaiming a few months ago that Bitcoin has no intrinsic value.
This statement is not true as it does have a huge production cost which in turn supports the security of the network. In my opinion it is gold that is not a store of value anymore.

Buy Bitcoin BTC just in case you were wrong. The world in general is more volatile than Bitcoin. You make plans, spend years to learn skills, get a degree, get a second degree, find a job and one day you wake up and learn from the news that your economy just collapsed. Your stonks went to zero, your bank blocks your withdrawls, capital controls take place, the value of your home drops by 50%, the company you work for went bankrupt, etc.
It is important to have a plan and even if you are a gold bug, consider that you might be wrong about gold being a safe asset. Since you have an interest in Bitcoin you will eventually figure out that it has all the required properties of being a safe-harbor and a store of value and has proved so in certain cases.

[The Cryptovator]

We can say currently we are encountering global recession. But even on this recession bitcoin still playing a good role although it was dumped for quite sometimes but overall performance is admirable. In this case bitcoin is safe haven for some people. We can't expect bitcoin is the safe haven for everyone because everyone's thought isn't same. Holding bitcoin is risky as well if you can't wait for longer. Because we really don't know when it will pump or dump. Main reason we can't say safe haven for everyone is much volatility of bitcoin price. That's the one of main risk for holders. But for bitcoin lovers like me, yes it's always safe haven because I can say I am owner of this assets and I am the one who controlling.

[gentlemand]

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

Gold has no intrinsic value. The price is what people believe it should have. I remember a no-coiner proclaiming a few months ago that Bitcoin has no intrinsic value.
This statement is not true as it does have a huge production cost which in turn supports the security of the network. In my opinion it is gold that is not a store of value anymore.

Bitcoin's value is largely decided by trust. Same goes for gold.

It has a history that goes back thousands of years. A fistful of gold in 300 BC still buys plenty of stuff thousands of years later. That's pretty compelling to many people.

Gold's actual qualities have settled its fate too. It's relatively common, but not too common. It can be shaped and reformed easily. The colour turns us on. It does have some actual usage, though that only contributes to a fraction of its value.

Personally I have less than zero interest in gold but I doubt it's going anywhere in our lifetimes.

[erickastella]

in my opinion, bitcoin has a good performance for now, people who buy bitcoin must understand very well about the risks, because it could be that when he bought it in the future bitcoin experienced a drastic decline, but despite so many people who like bitcoin, I am a bitcoin enthusiast but I didn't buy it with all my assets, I also bought a few stable coins.

[mk4]

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

Well, I don't hold gold, but gold's value is pretty stable if you ask me, and that's definitely something you would want in a safe-haven asset. Don't get me wrong, I'm a huge ass bitcoin bull, but when talking about safe-haven assets, bitcoin is mostly not the best choice as it's kinda untested.

Gold has no intrinsic value. The price is what people believe it should have. I remember a no-coiner proclaiming a few months ago that Bitcoin has no intrinsic value.
This statement is not true as it does have a huge production cost which in turn supports the security of the network. In my opinion it is gold that is not a store of value anymore.

Well, bitcoin and gold are priced the same: through solely supply and demand. Arguing which one has and doesn't have intrinsic value is quite silly in my opinion as both has really similar monetary characteristics.

[20kevin20]

Uncertainty is what makes it not be a safe haven asset. When you'll buy BTC and know that no matter what happens it'll grow during hard times or at least be somewhat stable, you could place it in that category. But honestly, the fact that it's only around a decade since it was born gives you doubts. It might've been the same when precious metals such as gold were found. Now it has a history and it's still being used after so long in so many domains.

You can't go to a Bitcoin ATM and say "I'll buy this for hard times". I mean you can, but it'd be silly to think that way. This year's beginning was a great test for BTC as a safe haven and it unfortunately failed, at least temporarily. Give it time - for now, it's mostly speculative. Maybe things will be decided within 2-3 generations.

[OneGoLuck]

...while extreme fanatics believe that Bitcoin is far better than gold. Bitcoin was born in the wake of the 2008 financial crash as a libertarian currency and as an instrument that could help cushion the event of a future financial crisis.

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

There is a limited number of bitcoins than can ever exist. On the other had there is a lot of gold in the solar system.

Bitcoin has 2 weaknesses.
1. The bitcoin encryption could be broken. Be it QC or a clever algorithm or whatever. That would make bitcoin almost worthless overnight.
2. The blockchain grows every day. Unless something is done, eventually it will become too big. And then one by one the nodes will quit supporting the network.

Compared to gold, bitcoin is unsecure. Gold can't lose all of its value overnight.
 

[BADecker]

Since Bitcoin has settled down to around $9,000 per - even though it fluctuates a bit - Bitcoin has become an increasing loss just like many other assets.

How is Bitcoin an increasing loss? Inflation. Bitcoin is maintaining its value around $9,000. So, it is being deflated by inflation just as $9,000 in fiat would be.

To make matters worse, standard official inflation is several times less than true inflation. And regarding value of some things that can be owned, Bitcoin has become a great loss because of this. Consider that the price of most food items has doubled or more in the last 2 years. But Bitcoin has bounced around this $9,000 mark.

Don't keep your money in Bitcoin, or in fiat. Find something of value that is steadily climbing. Whatever you find like this, it will probably have to be something that the average public doesn't really understand about, or wants but can't have for some reason.

[mk4]

Bitcoin has 2 weaknesses.
1. The bitcoin encryption could be broken. Be it QC or a clever algorithm or whatever. That would make bitcoin almost worthless overnight.
2. The blockchain grows every day. Unless something is done, eventually it will become too big. And then one by one the nodes will quit supporting the network.

I'd like to address these constructively.

1. Technically true, without a doubt. But let's take note that Bitcoin's encryption being broken is going to be the least of our problems if the encryption was actually broken.

2. While Bitcoin's blockchain is indeed growing day by day(currently at 285MB according to Blockchain.com[1]), and that's with a decade of existing. It's growing really really slow, to the fact that technology is growing A LOT faster. A 1 terabyte micro SD card[2] already exists for crying out loud. 10 years ago we had like what? 16-32 gigabytes max on SD cards?

Compared to gold, bitcoin is unsecure. Gold can't lose all of its value overnight.

Not sure how you even compare Bitcoin's security to a piece of metal to be honest. Also, remember that gold can a lot more easily be faked. To be completely sure if the gold you're receiving is actually legit, you'd have to do some chemistry or some applying of pressure or go ask some business to verify it for you.

[1] https://www.blockchain.com/charts/blocks-size
[2] https://www.amazon.com/SanDisk-Extreme-microSDXC-Memory-Adapter/dp/B07P9W5HJV

[zenthereum]

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

Gold has no intrinsic value. The price is what people believe it should have. I remember a no-coiner proclaiming a few months ago that Bitcoin has no intrinsic value.
This statement is not true as it does have a huge production cost which in turn supports the security of the network. In my opinion it is gold that is not a store of value anymore.

Bitcoin's value is largely decided by trust. Same goes for gold.

It has a history that goes back thousands of years. A fistful of gold in 300 BC still buys plenty of stuff thousands of years later. That's pretty compelling to many people.

Gold's actual qualities have settled its fate too. It's relatively common, but not too common. It can be shaped and reformed easily. The colour turns us on. It does have some actual usage, though that only contributes to a fraction of its value.

Personally I have less than zero interest in gold but I doubt it's going anywhere in our lifetimes.

Trust? I thought the system was trustless.
The history of gold ended with the advance of technology. Gold is nothing now, and in the next one hundred years it will keep losing value. It is overpriced manipulated and useless asset.

Why is gold a safe-haven to begin with? What makes gold have a price? The mining cost is irrelevant to the extreme valuation of this asset.

Well, I don't hold gold, but gold's value is pretty stable if you ask me, and that's definitely something you would want in a safe-haven asset. Don't get me wrong, I'm a huge ass bitcoin bull, but when talking about safe-haven assets, bitcoin is mostly not the best choice as it's kinda untested.

Gold has no intrinsic value. The price is what people believe it should have. I remember a no-coiner proclaiming a few months ago that Bitcoin has no intrinsic value.
This statement is not true as it does have a huge production cost which in turn supports the security of the network. In my opinion it is gold that is not a store of value anymore.

Well, bitcoin and gold are priced the same: through solely supply and demand. Arguing which one has and doesn't have intrinsic value is quite silly in my opinion as both has really similar monetary characteristics.

If your chart only has two variables then it's like that. Thank you for your comment. I find your argument silly as well.

[Twentyonepaylots]

It's dependent on your definition of a safe haven. If we're talking one's investment value then that's a big nope for me and anyone hawking that view is suspect. Anything could happen still. There's nowhere near enough track record to come to that conclusion.

Well most of us take the definition of safe haven asset as less volatile or not volatile asset at all, so that only means that we cannot accept, at least for now, bitcoin as a safe haven asset. Basically the movement of price of bitcoin is the reason why we cannot say that it is. But I'm thinking what if the price of bitcoin stays at $9K for a year? can we consider it as safe haven investment? or a riskier one because it looks like a tectonic plate that might move any time?

If we're talking about shielding your wealth from seizure and being able to transport it across borders unmolested then as a literal safe haven there's nothing else like it.

But a sudden deposit of huge amount might be hold by the exchanges right? or if you carry a hardware wallet it is still not totally safe and you might just lost it forever.

[Reid]

High risk, high profit.

I see bitcoin is still there.
It is not a fully pledged currency that could be used every day.
An asset to a greater percentage of bitcoin bag holders.
So, it will still depend on whoever will buy it. It's our choice. No one forced us to do so.  It's your risk at the end and hopes there will be no regrets.
It is not a safe-haven or whatever whatchamacallit.

[Zackgeno96]

Bitcoin evangelist has always attributed Bitcoin to be a safe-haven asset, while extreme fanatics believe that Bitcoin is far better than gold. Bitcoin was born in the wake of the 2008 financial crash as a libertarian currency and as an instrument that could help cushion the event of a future financial crisis.

Since Bitcoin is purely a speculative risk asset, many people have doubted its position as a purported safe-haven asset, I am not one of them anyways. However, since Bitcoin hasn't witnessed a global recession yet, I feel Bitcoin hasn't sufficiently defended its narrative as a safe-haven asset.

As the possibility of a global recession intensifies, what's your take on the possible performance of Bitcoin? will it go down with the traditional market or will it defend its name? I am very much interested to know.

Even after more than 10 years of its existence bitcoin is still considered as a new currency and many people say it is digital gold which also holds true.
Bitcoin is actually a safe heaven when it comes to both, the finances and security as well. Bitcoin wallets are more secure than traditional bank accounts as they can only be accessed by the password of the owner or the private key that they have, they can't be bruteforced by someone(at least there isn't any known case of it happening in the real world).
In terms of your money as well it is a safe heaven as it is always rising in value and it will continue to do so because of the code and rules on which it is built upon.

[nelson4lov]

This subject has been discussed a couple of times before. Nonetheless, I will share my take on it.  Bitcoin is not a safe haven asset (at least not for now) but it certainly won't go down the drain with  other traditional market instruments. Bitcoin is actually bigger than most people think it is. Given the opportunity, Bitcoin would perform better than traditional assets. So far so good, Bitcoin has held its ground.

Who remembered the market crash sometime in march? Where traditional assets plunged hard? Yes. Bitcoin did too but It has fully recovered from that loss.