One integral facet of Bitcoin's value that investors have long pointed to is its potential status as a "Safe haven" asset.
This decline may have stemmed from a knee-jerk reaction from investors, but the cryptocurrency's ultimate test as a potential safe haven may be yet to come.
A few charts indicate that immense economic turbulence is imminent, which could put Bitcoin to the test.
Because this weakness could ultimately prove to be a headwind for the stock market, it may also put Bitcoin's potential status as a safe haven asset to the test.
All the while, the U.S. stock indices have been flashing continued signs of strength, creating a tailwind that has helped propel assets like gold and Bitcoin higher.
Looming economic turbulence could be the ultimate test for Bitcoin.
Bitcoin has indeed been trading in lockstep with the stock market over the past several weeks and months, but this doesn't mean that this will always be the case.
Gold - for instance - has also been flashing signs of being treated by investors as a firm "Risk-on" asset over the past few weeks.
If the economy enters a prolonged downturn - as the factors mentioned above seem to suggest - then investors may begin treating assets like gold and Bitcoin more like safe havens and less like speculative trading instruments.
Unless there is a shift in this trend, the coming few months should be revealing for Bitcoin's long-term position within the global markets.
These charts suggest Bitcoin's "safe-haven" status is about to see its ultimate test
Published on Jul 12, 2020
by Cryptoslate | Published on Coinage
Coinage
Mentioned in this article
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.