Could Bitcoin potentially serve as a safe haven in the upcoming economic crisis

[Fatunad]

There's no such thing as safe haven, specially on things that it is really that volatile and something that had been globally accepted and recognized. Speaking about economic crisis then this is something which is inevitable
even just simply speaking about that non-stop inflation which it do makes living a great challenge.I do agree on some points that having other source of income or investment is the best thing that you should
do so that you would be able to make yourself that survive if ever this one happens since you do have multiple income source.

When you invest in bitcoin, you have the consciousness that it's going to yield you massive increase and then you hold or trade, the bitcoin network being a decentralized network and bitcoin itself being volatile comes with diverse opportunities for it investors, when there's economy inflation, the fiat currency is being affected but a decentralized network does not because it works on a different and entire network, the problem currently happening is what led to the massive adoption of bitcoin over fiat because the people needed a change in financial economy, we are already feeling the impact of bitcoin and more to come.

Investing on Bitcoin is always been that a good option for you to take.Even though this one doesnt assure about success or profits in the future but we arent that blind on not to see its potential basing up
on what it had been done on the last 1 decade which we can definitely be having that kind of positivity that it would really be still having the potential to reach out new heights in the future.
This is why it isnt really that bad an option for you to take on.

[Wexnident]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

Possible. I mean I don't think people who have Bitcoin would suddenly run away and trade their coins for gold (or any other asset)all of a sudden in an economic crisis since there's no connection between the local currencies and Bitcoin in the first place. People would then scramble to come and look for assets that would help them avoid the devaluation of local currencies which inevitably would lead them to Bitcoin (as one of the options that is). It is volatile however, so I guess that's one risk of it in comparison to gold.

At the very least, I don't think I see Bitcoin dropping in value in an economic crisis even if people don't buy it to avoid fiat.

[bbc.reporter]

@mk4. However, bitcoin's correlation with the more traditional markets has been going down. If this continues after every bull and bear markets, we might witness bitcoin being considered by traditional finance as an alternative investment for hedging. The interest on a spot ETF for bitcoin is clearly a sign of this. I shake my head to the doubters.

The falling correlation has been noticed since July.



Bitcoin's (BTC) fortune is no longer tied to sentiment in the U.S. stock markets.
The 90-day rolling correlation of changes in bitcoin's spot price to changes in Wall Street's tech-heavy equity index, Nasdaq, and the broader index, S&P 500, has declined to near zero. That's the lowest in two years, according to data tracked by crypto derivatives analytics firm Block Scholes.

The dwindling correlation with traditional risk assets means that crypto traders focusing solely on traditional market sentiment and macroeconomic developments may face disappointment.

Source https://www.coindesk.com/markets/2023/07/05/bitcoin-is-no-longer-correlated-to-us-stocks/

I couldn't count how many times bitcoin has correlated and de-correlated from traditional markets since the past. Who's to say it can't correlate sometimes soon again? I wouldn't make investment decisions based on this personally.

Yes hehehe, I was assuming that the decorrelation would become stronger and continue as the traditional markets dump. However, what might also occur is the traditional markets dump on a higher percentage compared to bitcoin and make bitcoin appear like a more stable investment. Bitcoin has been on low volatility when it is not pumping. High volatility on only arrives when there is a pump. This might be our signal that bitcoin is entering a bull market or a trigger.

[xSkylarx]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

Well, its history tells itself that bitcoin is somewhat of a safe haven but not totally because we know of its volatility, but when we base our decisions on history, we will know that the price keeps getting high, meaning if you put your money way back in 2016 into bitcoin, then for sure your money hasn't lost its value, even if you gain tons of profit on it. So I would probably say yes, but it is still not recommended because anytime it could be a price dump.

[stompix]

@mk4. However, bitcoin's correlation with the more traditional markets has been going down. If this continues

It's back up, that's a month old article
https://www.fxstreet.com/cryptocurrencies/news/bitcoin-and-us-stock-market-correlation-shoots-up-is-btc-at-feds-mercy-again-202308151148#:~:text=Bitcoin%20correlation%20to%20the%20US,gone%20from%20%2D0.52%20to%200.21.

The correlation between Bitcoin price and stocks, especially the S&P 500, has seen a considerable uptick in the last two weeks. The correlation to the S&P 500 has shot up from -0.73 to 0.08, while the tech-heavy Nasdaq 100 index has gone from -0.52 to 0.21.

First of all, everyone should wake up from some enchanted dream where milk and honey flow in streams, interest rates don't exist and everyone earns exactly what they need. Since the pandemic was declared, we have actually been living in an economic crisis that has been further aggravated by the war in Ukraine and all those crazy measures implemented by various countries to prevent us from experiencing a complete collapse, are slowly but surely began to return to us like a boomerang.

But , but...all you need is buy Bitcoin!
It's proven that no matter what happens, even if an asteroid wipes all life from the Earth when the halving happens we're going to be rich!

I really don't understand why some think that crumbling economies, people out of jobs, bankruptcies, and suicides left and right would magically make all unemployed and bankrupt people pour their debts into bitcoin, and although I try every single f* time to ask these guys why do they think this will be the way things will unfold I still haven't got a single answer that is not signature quota material.

OP, zoom out Bitcoin's chart to the maximum and tell me if that isn't a safe haven.

So, we need to zoom out past the period of economic crises that has set it to see the "safe haven" aspect.
Kind of....weird, let's say at least, isn't it?

[jasonjm]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

It is assumed and hoped that one day, if an economic crisis occurs, Bitcoin could act as an inflation and crisis hedge. But, in my opinion, it is just an assumption. Looking at the recent bitcoin trends, the market fluctuated with US CPI data. In 2020 when the COVID pandemic hit the world all stock markets including Bitcoin prices crashed. Yes, you can say that the ROI on BTC investment is more and you can gain profit relatively quickly, and if you have the money you can buy the dip but for an economic crisis, gold is the best option.

[OgNasty]

Whether or not Bitcoin will be a safe haven during a major economic crash is the million dollar question for sure. It does appear to be breaking down in price along with the rest of the market, but it’s way too early to say definitively either way. One thing is certain though, at some point Bitcoin will be faced with a major recession and the market will have to choose up or down.

[sunsilk]

Hello everyone,

there's a lot of discussion about an impending economic crisis.

It's been there since the pandemic has started and we're just seeing it being prolonged by a lot of factors that's happening through the global economy.

I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

With its history, you can say that it did well. But if you're just going to look at how much it was on 2021 bull run and today, you'll be disappointed.

But look at the overview of it on its entire history and it can still be said the best performing asset, if not, one of the best.

[DanWalker]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

Although inflation remains high and many uncertainties in the economy remain unresolved, I do not think another wave of severe economic crisis to occur. All the bad things happened in 2022, and we are getting through it step by step, things are still bad but in my opinion, it is getting a lot better than 2022.

Almost during the economic crisis of 2022, all assets are severely affected and bitcoin is no exception. But this year, bitcoin has had strong rallies while other assets remain in the doldrums, not much better.

Bitcoin is a store of value or a safe haven depending on how trustful you are with it. Because its volatility is too great and many consider it unsuitable as a safe haven.

[Lucius]

This means that we are going to end up with a return that would be basically keeping its value and that's about it. This isn't really something we should be aiming at because it would be better if we could end up with a return that would be bigger.
~snip~

You and I and the majority have no influence on the price of BTC and that game is far beyond our capabilities if we take into account all possible manipulations or black swan events. In such an equation, there will always be more than one X factor that you cannot predict, and that is why I say that it is not wise to throw all your cards into Bitcoin, regardless of what you think about it. It's definitely easier to be in all of this if you don't look at Bitcoin exclusively from the angle of profit, but that's obviously something that few can afford.

But , but...all you need is buy Bitcoin!
It's proven that no matter what happens, even if an asteroid wipes all life from the Earth when the halving happens we're going to be rich!

I really don't understand why some think that crumbling economies, people out of jobs, bankruptcies, and suicides left and right would magically make all unemployed and bankrupt people pour their debts into bitcoin, and although I try every single f* time to ask these guys why do they think this will be the way things will unfold I still haven't got a single answer that is not signature quota material.

You cannot expect people to behave differently from the environment that shapes them, whether it is the media, politics or social networks, everything is in the service of almighty capital that can convince billions that a virus with a mortality rate of less than 1% will decimate humanity or that it is actually a good thing that the authorities are printing money and dropping it from helicopters.

For some, Bitcoin is a solution for everything, but at the same time, the majority have never used it to pay for any goods or services, but are waiting for halving to do its magic or for someone to invest trillions in BTC and make them rich.

[uswa56]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

I don't think so because the price of Bitcoin is very influential on the global economy and even like this year there was a deep price correction caused by an increase in currency interest rates and that had quite a big effect on Bitcoin price movements.
Likewise, when there is an economic crisis, it is clear that Bitcoin is not a safe place to take refuge.
Bitcoin price movement is so significant and fast, it's actually very dangerous.

[Woodie]

If the economic crisis doesn't affect how our technology works... for example the internet and all its infrastructure, then of course bitcoin & all cryptocurrencies would fit in well but unfortunately not so many people are familiar with this technology, which tells me we could revert to much simpler ways of trade such as the barter system!

Btw, in a case of an economic crisis...two things might happen,  either bitcoin crashes with fiat and all other related systems or it will jump up as demand will be so high as everyone tries to get their hands on some crypto coins...so not an easy replacement if we think about  it.

[posi]

Hello everyone,

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

I don't think so because the price of Bitcoin is very influential on the global economy and even like this year there was a deep price correction caused by an increase in currency interest rates and that had quite a big effect on Bitcoin price movements.
Likewise, when there is an economic crisis, it is clear that Bitcoin is not a safe place to take refuge.
Bitcoin price movement is so significant and fast, it's actually very dangerous.

Honestly, bitcoin is only suitable for investment, it is not suitable as a safe haven when its volatility is too great. We can clearly see that by what happened in 2022 or just with the news that the Fed will continue to raise interest rates immediately causing bitcoin to be dumped. A volatile asset every time news is released, it is not suitable as a safe haven for us if there is an economic crisis. If talking about assets as a safe haven, I still think that gold is still the most suitable asset.

[Davidvictorson]

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

what do you think ?

As far as I know, there will always be impending economic crises both real and being stirred up by the government to cause fear and panic. What you should have noticed is that the price of bitcoin is not in any way affected by these news. Infact what we are observing are people adopting digital currency as a way to save their wealth, that is a store of value. It is just like an inverse relationship where the more they talk about the "impending economic crisis" the higher the rate of people adopting bitcoin to escape from them financially and otherwise. 

[Wind_FURY]

OP, zoom out Bitcoin's chart to the maximum and tell me if that isn't a safe haven.

So, we need to zoom out past the period of economic crises that has set it to see the "safe haven" aspect.
Kind of....weird, let's say at least, isn't it?

Zoom out past the period of economic crises? No ser. You zoom out to see the REAL trajectory. Because we don't have more than 50 years of data for Bitcoin, let's use,

GOLD - Zoom out to the maximum.

https://goldprice.org/gold-price-history.html

The DOW JONES AVERAGE - Zoom that out to the maximum.

https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

That's the trajectory WITH ALL the economic crises in their history. Why? Because unlimited fiat.

Plus in a philosophical level, didn't Satoshi build Bitcoin because "Chancellor on brink of second bail out for banks"?

- The network has ossified towards only 21,000,000 coins to be mined and there's unlimited fiat. BRRRRR. With Bitcoin's growing popularity, adoption, and demand, where will its trajectory be in a zoomed out chart? Down?

[rat03gopoh]

If I look at history, there is no investment instrument that maintains value at the beginning of the crisis. Bitcoin is also on this list, and there is no guarantee that the recovery history until it gets a new ATH will be repeated.
Ideally, you can think of any safe haven if the crisis has been going on for some time and you've convinced yourself that your survival will be fine for a potential longer crisis.

[eaLiTy]

there's a lot of discussion about an impending economic crisis. I'm curious about how Bitcoin will perform during this crisis. Will it function as a safe haven similar to gold? Or will its value decline significantly?

If there is a financial crisis you would find many investors coming into this space and the market might be rallying because of that but it is a highly risky market considering the volatility level and you cannot compare it with gold at this time (had a different view earlier but considering the price now, view changes), i would not necessary call it a safe heaven unless you were smart enough to enter at the bottom.

[justdimin]

If the economic crisis doesn't affect how our technology works... for example the internet and all its infrastructure, then of course bitcoin & all cryptocurrencies would fit in well but unfortunately not so many people are familiar with this technology, which tells me we could revert to much simpler ways of trade such as the barter system!

Btw, in a case of an economic crisis...two things might happen,  either bitcoin crashes with fiat and all other related systems or it will jump up as demand will be so high as everyone tries to get their hands on some crypto coins...so not an easy replacement if we think about  it.

I do not think that it would be anything like that at all. That's just way too much doom to think about at this moment and it shouldn't be really that much of a big deal at all. I understand that some people may think that it doesn't work that way but that's eventually not a big deal at all.

Just focus on how you could make a profit and that should be the important deal. Get as many bitcoins as you could afford at this moment and you are not going to face any troubles like that in the future such as no internet and all that. That would require something like maybe a nuclear war or something to happen and I do not think that such thing will happen, it would be very unlikely and should not be considered a possibility.

[WatChe]

Well, its history tells itself that bitcoin is somewhat of a safe haven but not totally because we know of its volatility, but when we base our decisions on history, we will know that the price keeps getting high, meaning if you put your money way back in 2016 into bitcoin, then for sure your money hasn't lost its value, even if you gain tons of profit on it. So I would probably say yes, but it is still not recommended because anytime it could be a price dump.

Price Volatility is the biggest concern of Bitcoin mainstream adoption. Yesterday I Price of Bitcoin was over 29k and this morning its around 26.5k, CMC says that Bitcoin went down to 25.5 before making a rebound. So yes you need to remain mentally ready that your investment may get struck for some times.

We need to balance out between Bitcoin and real world financial system like fiat. Both have there pros and cons, just don't put all your eggs in one basket.

[karabiber]

If I look at history, there is no investment instrument that maintains value at the beginning of the crisis. Bitcoin is also on this list, and there is no guarantee that the recovery history until it gets a new ATH will be repeated.
Ideally, you can think of any safe haven if the crisis has been going on for some time and you've convinced yourself that your survival will be fine for a potential longer crisis.

In order for an investment instrument to be described as a safe haven, it must be unrelated or negatively related to other investment instruments in times of crisis or recession. Gold is an example. Its volatility is not high and it is a safe investment tool that has always been adopted by people but it is disadvantageous in terms of storage conditions and so on. Bitcoin volatility rate is at the top compared to all other investment instruments. The nature of the cryptocurrency market demands it.

Bitcoin's volatility does not prevent it from being a long-term investment tool. Bitcoin's limited supply on the contrary, decentralization and transparency, easily stored and easier international transfers from banks make Bitcoin a reliable investment tool. If your investment is in an amount that will be forgotten for you and will not be needed immediately, it may be positive to store Bitcoin in times of economic crisis but if your investment can be needed at any time, it will be useful to turn to gold where volatility is at a low level in times of crisis.