Rising inflation forces investors to look for defensive assets.

[Gyfts]

Bitcoin is a speculative asset, many investors yet do not consider it as a safe haven, but if we check this, it is not totally true. Like the El Salvador that bought bitcoin at a price around $50000, or some people that bought bitcoin at all-time-high, bitcoin later decreased, but they have nothing to be worried about, only traders should have someone to be worried about, not long term investors, the price of bitcoin will still later reach all-time-high and reach six digits. It can be said that if someone want to consider bitcoin as a safe haven, he should hold it for at least 4 years or more, then bitcoin as a save haven or store of value would be realized by the holder.

Bitcoin is extremely volatile, and we have experienced sporadic and unexpected plunges in its price, is Bitcoin a risky investment? Yes, because you can't be certain it would hold its value at any point in time, it could either plunge or appreciate in price and thus that doesn't make it a safe haven asset. Your example with El Salvador and long term hodlers is prove that Bitcoin is a speculative asset, Why Because you are looking at the long term and of a true the price of Bitcoin would definitely appreciate in the long period, but isn't that how speculative investments work: You buy an asset and strongly 'guessing' that it would produce profits in the long run and you're unconcerned if it dumps in the short period. Safe haven assets either holds its value or appreciates for a pretty long time like Gold, i am afraid Bitcoin doesn't or not yet at least.

Volatility gets better with mass adoption, though. As speculative as Bitcoin is, all other markets have some risk of crashing leaving some investors out cash. Long term Bitcoin probably outpaces gold or other precious metals for the sole reason that most other currencies are inflating too rapidly to warrant usage. Gold would have taken the place of these currencies, but not in a digital age.

[Wong Gendheng]

Inflation in my country is always high and exceeds economic growth, this makes prices continue to rise and many residents cannot buy necessities, malls are quiet, automatic sales drop, property continues to decline, this makes us always have to be creative to find alternative investments that can overcome inflation , and the best in my opinion right now are cryptocurrencies because they can be sold at any time.

[so98nn]

I wouldn’t call crypto currency as defensive investment at all. The crypto space is full of surprises and any small to big event around the world can shake the baseline of crypto coins. If you have said they can put money into stable coins and wait for the market to get optimum level of stability then that’s another story. However, in that case also crypto is not defensive type it’s more or less temporary escape zone.

Defensive investment would be something like Real Estate. Idk, but most of the time real estate is only growing al the time whether market is crashing or there is war out there.

[Despairo]

Does Bitcoin's ROI is huge? Yes
Can Bitcoin save from inflation? Maybe
Does the future will depends on past history? Nope

This mean, if you want to save your money from inflation by invest in Bitcoin, it doesn't guarantee 100% the price always increase. Not to mention, most people is panic when the market goes red and sold before the price increase. Just invest what you can afford to lose, you wouldn't regret if Bitcoin price goes dump, however you will happy if it goes opposite.

[Reid]

What I worry is investors looking at the Bitcoin price for every minute of their life once they are invested in it. That's what I did before and it took a toll of stress to me. That should not be the case when it comes to purchasing Bitcoin. There should be patience.
Now it's my wife that is actually stressing me out because of the recent high fluctuations in the market. She tells me to sell whenever the price goes up like a talking price tracking device.  
Anyway, as an asset being kept for a long period of time is what will make it sweeter. The only wall I see from them buying is the expensive price which should be taken in deep consideration. They don't really need to buy 1 BTC forcefully. Satoshis will be sufficient enough and if done monthly or annually could pile up into 1 Bitcoin in the future.

[el kaka22]

I wouldn’t call crypto currency as defensive investment at all. The crypto space is full of surprises and any small to big event around the world can shake the baseline of crypto coins. If you have said they can put money into stable coins and wait for the market to get optimum level of stability then that’s another story. However, in that case also crypto is not defensive type it’s more or less temporary escape zone.

Defensive investment would be something like Real Estate. Idk, but most of the time real estate is only growing al the time whether market is crashing or there is war out there.

It is a "defensive" method if you are looking to just protect your investment at all costs. I mean sure it could drop in the short term, but in the long term when the dollar or any fiat you may use goes down due to inflation, bitcoin goes up against it. You just need to zoom out and see it yearly or so in order to understand how awesome it is.

If you look at it from this month to last month (well it went up this time) you may see losses time to time, but yearly it is a good investment. 90%+ of the time when you buy bitcoin and wait a year, that means you are going to be in profit. Doesn't mean it is true for every single time, but that is usually what happens.

[LUCKMCFLY]

When talking about defensive assets, everyone thinks of Gold as their first option, Real Estate investment as their second option and some people with a very low percentage think of BTC, despite the fact that BTC has a much faster growth than gold itself , but it has an impediment that has been highlighted by the big news worldwide, as well as by some economists and, of course, by bankers and some governments, when they say that it is a very high-risk asset and that they do not recommend it.

Unfortunately many people still faithfully believe in the news and manipulation systems where they do not think for themselves that an asset can be bought at $44k right now and then reach $100k more, that is very difficult to see, however many people already is waking up and they are looking at BTC as a safe haven, this is to be admired.

[24Kt]

When talking about defensive assets, everyone thinks of Gold as their first option, Real Estate investment as their second option and some people with a very low percentage think of BTC, despite the fact that BTC has a much faster growth than gold itself , but it has an impediment that has been highlighted by the big news worldwide, as well as by some economists and, of course, by bankers and some governments, when they say that it is a very high-risk asset and that they do not recommend it.

Unfortunately many people still faithfully believe in the news and manipulation systems where they do not think for themselves that an asset can be bought at $44k right now and then reach $100k more, that is very difficult to see, however many people already is waking up and they are looking at BTC as a safe haven, this is to be admired.

A lot of population are still sticking to the traditional assets because they want to see their assets. Whereas, with bitcoin, most of them are hesitant because it is new, and the truth is most of them don't know how to transact with crypto. So they prefer to be on the safer side, which are the tangible assets. We can't blame them because people are used to these assets. But for those who discovered crypto, they feel they are lucky to be in this market. Patience is needed here and understanding of the market, in order to gain from this market. So yes, this market is not for all.

[bitzizzix]

When talking about defensive assets, everyone thinks of Gold as their first option, Real Estate investment as their second option and some people with a very low percentage think of BTC, despite the fact that BTC has a much faster growth than gold itself , but it has an impediment that has been highlighted by the big news worldwide, as well as by some economists and, of course, by bankers and some governments, when they say that it is a very high-risk asset and that they do not recommend it.

Unfortunately many people still faithfully believe in the news and manipulation systems where they do not think for themselves that an asset can be bought at $44k right now and then reach $100k more, that is very difficult to see, however many people already is waking up and they are looking at BTC as a safe haven, this is to be admired.

A lot of population are still sticking to the traditional assets because they want to see their assets. Whereas, with bitcoin, most of them are hesitant because it is new, and the truth is most of them don't know how to transact with crypto. So they prefer to be on the safer side, which are the tangible assets. We can't blame them because people are used to these assets. But for those who discovered crypto, they feel they are lucky to be in this market. Patience is needed here and understanding of the market, in order to gain from this market. So yes, this market is not for all.

I think everyone who invests in any type of investment, they know what bitcoin is and the reason not to choose it is because of its high fluctuation and volatility.
and it makes them hesitate for fear of losing, but if it's done long term, I think it's okay and maybe the real reason is because they don't want to learn it and understand it well and are still comfortable with the traditional.
and over time as bitcoin continues to grow and become more popular and many people benefit including inflation, they will learn about it and will consider it and maybe switch. Bitcoin will solve any problem if you treat it right.

[adaseb]

Crypto on paper sure looks like a great hedge against inflation but a lot of that matters where you buy in. I know many people personally who pretty much bought the top at $66-69K because they were hearing of 6-7% inflation and they wanted to hedge and look what happened.

Inflation maybe will peak at 10% but from their investment they lost 50% at one point. And some of them already took a loss in the low $30Ks areas.

So it’s great as long as Bitcoin doesn’t drop lower. However nobody knows where the bottom is. Could be $30K or $20K or $15K.

[jaberwock]

I wouldn’t call crypto currency as defensive investment at all. The crypto space is full of surprises and any small to big event around the world can shake the baseline of crypto coins. If you have said they can put money into stable coins and wait for the market to get optimum level of stability then that’s another story. However, in that case also crypto is not defensive type it’s more or less temporary escape zone.

Defensive investment would be something like Real Estate. Idk, but most of the time real estate is only growing al the time whether market is crashing or there is war out there.

Stable coins are backed by fiats so they are not different from the local money that you use but they can still be affected by inflations. Someone can call crypto as a safe heaven, maybe what they mean is it can save you from the inflation and I think it has to do with the supply of cryptos which are limited.

I don't think real estate is a defensive investment. What if there is a war? Can a real estate defend itself from the projectiles and falling debris? It can be easily damaged but not cryptocurrencies because they are digital. Cryptos values can go down but that's not permanent. They can recover and the increase will be twice better than before.

[DanWalker]

When talking about defensive assets, everyone thinks of Gold as their first option, Real Estate investment as their second option and some people with a very low percentage think of BTC, despite the fact that BTC has a much faster growth than gold itself , but it has an impediment that has been highlighted by the big news worldwide, as well as by some economists and, of course, by bankers and some governments, when they say that it is a very high-risk asset and that they do not recommend it.

Unfortunately many people still faithfully believe in the news and manipulation systems where they do not think for themselves that an asset can be bought at $44k right now and then reach $100k more, that is very difficult to see, however many people already is waking up and they are looking at BTC as a safe haven, this is to be admired.

A lot of population are still sticking to the traditional assets because they want to see their assets. Whereas, with bitcoin, most of them are hesitant because it is new, and the truth is most of them don't know how to transact with crypto. So they prefer to be on the safer side, which are the tangible assets. We can't blame them because people are used to these assets. But for those who discovered crypto, they feel they are lucky to be in this market. Patience is needed here and understanding of the market, in order to gain from this market. So yes, this market is not for all.

Because it is a new market and to be honest, there are too many scams around crypto. Many people haven't entered the market when they hear about cryptocurrencies, the first thing that comes to mind is bitcoin. Because this causes misunderstandings that make them not really fully trust bitcoin.

Along with the short-term volatility of bitcoin is also what makes them fear their wealth will evaporate when investing in bitcoin, only those who have been in the market long enough can feel the difference between bitcoin and its true value.

[wozzek23]

Stable coins are backed by fiats so they are not different from the local money that you use but they can still be affected by inflations. Someone can call crypto as a safe heaven, maybe what they mean is it can save you from the inflation and I think it has to do with the supply of cryptos which are limited.

I don't think real estate is a defensive investment. What if there is a war? Can a real estate defend itself from the projectiles and falling debris? It can be easily damaged but not cryptocurrencies because they are digital. Cryptos values can go down but that's not permanent. They can recover and the increase will be twice better than before.

To consider that there could be a war where you buy a house, maybe you are not in a safe place? I mean I can buy a house where I live right now with the 100% trust that there wouldn't be a war here, maybe some terrorist attack? But that is not a war and you could get insurance for that I suppose, or at least rebuild.

Aside from that we really can't do much, that is the most defensive one, if you buy gold then they can steal your gold too, which is why the idea of defensive investment is not just how safe it is to keep it, but more like how defensive it is when there are economical problems. Against stuff like pandemic, or war in another nation like right now, or economical crisis like stock market crash. Gold, crypto, real estate these are all defensive in that regard.

[gantez]

Crypto on paper sure looks like a great hedge against inflation but a lot of that matters where you buy in. I know many people personally who pretty much bought the top at $66-69K because they were hearing of 6-7% inflation and they wanted to hedge and look what happened.

Inflation maybe will peak at 10% but from their investment they lost 50% at one point. And some of them already took a loss in the low $30Ks areas.

So it’s great as long as Bitcoin doesn’t drop lower. However nobody knows where the bottom is. Could be $30K or $20K or $15K.

This reason can be good enough to say bitcoin is not a hedge for inflation. If you want to hedge your funds in btc and running away from inflation on fiat and the price drops even heavily, it has defeat the aim of it. Bitcoin is volatile that can move any direction whether bull or bear and unregulated, so it is not the best for hedging.

[sana54210]

To consider that there could be a war where you buy a house, maybe you are not in a safe place? I mean I can buy a house where I live right now with the 100% trust that there wouldn't be a war here, maybe some terrorist attack? But that is not a war and you could get insurance for that I suppose, or at least rebuild.

Aside from that we really can't do much, that is the most defensive one, if you buy gold then they can steal your gold too, which is why the idea of defensive investment is not just how safe it is to keep it, but more like how defensive it is when there are economical problems. Against stuff like pandemic, or war in another nation like right now, or economical crisis like stock market crash. Gold, crypto, real estate these are all defensive in that regard.

Whether you choose to go for gold, real estate, and Bitcoin, they are all really good investment. Although what the other comment was talking about is in a situation where there happens to be war or anything like that, that real estate is more going to be doomed.

And you yourself have also pointed out that gold can be stolen, although anyone who is investing in gold, I wouldn’t advise them to be keeping it themselves, it is best to invest through reliable companies that will store your gold in a safe place for you, and you can be able to just trade it online. So far Bitcoin seems to be a really good option since you don’t really have to stress much about all that, although you will have to be careful with your private keys. So they all have their pros and cons.

[maydna]

If investors can accept bitcoin price fluctuations, they can use bitcoin as a store of their funds, but not all investors can accept it. Investors want to make sure their funds are safe, but they also know that no investment can be 100% safe, even gold, but gold is still the main choice for investors, especially traditional investors, to keep their money's value from falling far.

But for, those who can accept the fact that the price of bitcoin will always go up and down every day will try to use bitcoin as a hedge of their funds. Those who have used bitcoin in recent years see that bitcoin can potentially increase the value of their money in the future, especially if they hold it for several years. So, in this case, if they want, they have two hedges of their money, namely in the form of gold and bitcoin, but the return on bitcoin will be much greater than gold because of the volatility factor.

[darewaller]

It all depends on what the investors are looking for. Are they looking for an investment that would benefit them on a long term or short term? If they are looking for an investment that is going to benefit them on a long term, then cryptocurrency is what they should be investing in right now. Which other investment do you think is currently better than investing money in Bitcoin?

You should show them the price charts of Bitcoin,  and let them see for themselves how Bitcoin has been able to keep defending itself and moving upwards despite everything that has happened. Bitcoin has moved from a price that is below $1 to over $60,000 in a decade. So who says that it wouldn’t move further in the years to come?

[RealMalatesta]

It all depends on what the investors are looking for. Are they looking for an investment that would benefit them on a long term or short term? If they are looking for an investment that is going to benefit them on a long term, then cryptocurrency is what they should be investing in right now. Which other investment do you think is currently better than investing money in Bitcoin?

You should show them the price charts of Bitcoin,  and let them see for themselves how Bitcoin has been able to keep defending itself and moving upwards despite everything that has happened. Bitcoin has moved from a price that is below $1 to over $60,000 in a decade. So who says that it wouldn’t move further in the years to come?

Unfortunately they do not look at crypto as a long term deal, there are way too many people who are invested that thinks about it like a short term good thing. I am not really sure if it could be done but they just want to get rich quick. Weird thing is, that is not impossible neither, there are a lot of people who invested into weird things like shiba, and turned couple thousand to millions.

It won't happen again right now, but it is definitely the thing that causes the biggest trouble for the people's perception of crypto. Which is why to tell people to consider crypto in a more long term thing is a bit of a bigger deal than usual.

[sunsilk]

Cryptocurrencies are volatile, when you say that they're also into inflation. Well, that could be the fluctuation that you're considering as the inflation.

It's a swinging market and there could be really the worse days and there are the best days as well. The matter for these investors that want to hedge and save their assets, they don't have to jump off quickly into buying bitcoin.

They need to understand it first and how it works so that they won't be surprised if it ever fluctuates.

[Doan9269]

Literally, some assets has been going down in value including fiat and cryptocurrency due to inflation and other issues around the world.

Except for bitcoin which still maintain it value and worth.

So it's a little difficult to recommend crypto for invertors to hedge their funds since all almost every crypto asset is going down in value too.

Altcoin are mostly unreliable except for few ones, that is why it is very important for you to clarify your stance while recommending altcoin because many may result into failed project and you will apparently appear to be a liar for recommending them with such.

Therefore investors are seeing it as digital Gold and it almost taking the role of Gold.

Bitcoin has proven at many times more higher than gold in profitability statistical data base on research,
i think i read something about the annual and monthly profitability of bitcoin on https://bitcointalk.org/index.php?topic=5388701.msg59451937#msg59451937 one of the threads published by @Ratimov on the forum. while gold remains a physical asset, bitcoin has proven on several occasions as the only decentralized digital assets more profitable than gold as of recent.