Bitcoin Continues to Gain Traction as Safe Haven
Throughout its short history, Bitcoin (BTC) has been seen as anything but centralized, sovereign, and censorable. The crypto asset was created by a pseudonymous individual, is secured by a global group of miners, and is backed by no government, traditional finance system, or common entity.
And as a result, many have looked to Bitcoin and its brethren — other digital assets — as a much-needed escape hatch from fiat and government overreach.
Simply look to the fact that it was released in the wake of the 2008 Great Recession, and that Satoshi Nakamoto, the creator of the project, embedded a headline from the Financial Times that accentuated central bank irresponsibility.
Despite these clear undertones, for most of the asset’s history, most in traditional finance have viewed Bitcoin as nothing more than a scam, Ponzi scheme, or pump and dump asset that has no clear inherent value. But, over the past few months, due to dovish fiscal policy and growing macroeconomic uncertainty, many economists have begun to give nods to Bitcoin as a potential hedge.
Most recently, Jim Iuorio of CNBC “Fast Money”, who also trades on the floor of the CME, remarked in a recent segment that he’s begun to acknowledge Bitcoin for what it is: a potential hedge/safe haven against fiat risk. With this in mind, Iuorio went on to remark that if Bitcoin hits $10,850, which it has as of the time of writing this, he would be inclined to buy, adding that he’s been rather impressed with BTC since the Federal Reserve went dovish.
Iuorio joins a number of mainstream media contributors and reporters that have flipped bullish on Bitcoin. As reported by Ethereum World News previously, a Bloomberg columnist and prominent economist going by Tyler Cowen recently gave a few nods to Bitcoin, releasing an article titled “Bitcoin is (Probably) Here to Stay”.
In that piece, Cowen gave four main reasons why the leading cryptocurrency is likely to find long-term traction: geopolitical tension, like the (recently-ceased) trade war between China and the United States, is creating the need for a hedge; the launch of Facebook’s Libra validates Bitcoin as a viable trend; the left-leaning trend of politics in the U.S. and other Western nations may be validating the need for a financial safe haven; and the macroeconomic climate is currently setting the stage for a rise of an alternative/uncorrelated asset.
And most notably, a Financial Times recently hinted that it sees Bitcoin as a haven asset, releasing an article titled “Has bitcoin joined the ranks of classic haven assets?” In the article, the outlet revealed that there are correlations between BTC, the Japanese Yen, Swiss Franc, and, most importantly, gold.
Photo by Patrick Baum on Unsplash
