The long sought after non-correlated asset – the safety raft, the lifeline, the shelter from the bear market. When it all comes tumbling down, what will you be left holding?
Bitcoin! The volatile asset may not seem like an obvious choice, but it and other crypto assets are emerging as popular safety nets.
In many ways, Bitcoin was created to be a hedge against the financial system. Its first block was mined in the wake of the largest recession since the Great Depression, and it’s white paper proposed a new global and independent currency.
Despite Bitcoin’s best intentions, it hasn’t always been crystal clear if its price was affected by the movement of traditional stock markets. But recent volatility across international markets is helping BTC’s bid for the title of superior non-correlated asset.
Last Monday, China announced plans to raise tariffs on $60 billion worth of U.S. goods, causing the Dow to fall a whopping 562 points. In complete defiance of the market, Bitcoin hit a 9-month high of $8,203 the following day. Bitcoin started its climb as trade talks broke out between the U.S. and China, Mexico, and Canada, seeing its most significant gains as the negotiations reached a breaking point.
As Berry Silbert, CEO of Digital Currency Group, explained to Fortune, Bitcoin is building a track record of performing in times of crisis. “When ‘Brexit,’ happened, Bitcoin went up. When ‘Grexit’ happened, Bitcoin went up,” he said.
The pound slipped in April as Brexit talks reached another stalemate and E.U. negotiators warned a deal was not likely. Bitcoin, on the other hand, surged to a six-month high, hitting $5,000 for the first time since November.
While it’s nearly impossible to draw a direct correlation between events like Brexit to the price of Bitcoin, there are clear economic advantages to holding crypto. Different than gold, which in recent years has been held in large sums by banks, Bitcoin has not yet been fully embraced by financial institutions or governments, making it a better hedge against economic turmoil.
On CNBC’s Fast Money, Morgan Creek Digital founder and CEO Mark Yusko, said that bitcoin makes a great diversifying asset in a stocks portfolio and that every investor should invest in the dominant cryptocurrency. Read more.
Responding to a question from Bloomberg analyst Eric Balchunas about whether he would ever invest client funds in a bitcoin ETF, Geraci stunned his fellow panel members when he said that millennial investors overwhelmingly desire to hold bitcoin instead of traditional hedge assets like gold. Read more.
Even as bitcoin SV (BSV) enjoyed a Craig Wright/Satoshi bump Tuesday, the U.S. Copyright Office was hard at work dispelling notions that it officially “recognized” anyone as the inventor of bitcoin. Read more.
The leading cryptocurrency bitcoin (BTC) started the day at $7,638 gradually reaching its intraday high of $7,946. At press time, bitcoin is trading at around $7,914, up 2.64% over the past 24 hours. Read more.
LocalBitcoins trades in Iran is on the rise after US President Donald trump on Wednesday issued an executive order stopping the purchase of Iranian aluminum, steel and iron. US President said the ban will stop Tehran from developing intercontinental ballistic weapons. Read more.
Fraudsters have been adding fake cryptocurrency wallets to the Google Play store in an attempt to cash in on rising bitcoin (BTC) prices, ESET antivirus researchers claimed on May 23. Read more.
Social media giant Facebook is set to roll out its own cryptocurrency dubbed “GlobalCoin” in 2020, according to a report from the BBC. Read more.
Litecoin price (LTC) rose above $100 Friday for the first time in eight days, a move that marked the asset’s likelihood of retesting its 2019 high at $107.60. Read more.
AT&T announced today that it is accepting crypto payments through Bitpay, which supports a number of major cryptocurrencies. A short press release notes that the integration is complete and users can make payments with Bitpay via the AT&T website or through the mobile app. Read more.
The governor of the U.S. state of Montana, Steve Bullock, signed House Bill 584 into law earlier this month, recognizing utility tokens and exempting them from being considered as securities under local rules, with caveats. Read more.
Bitcoin bulls are already touting the next great “halvening” as a catalyst for more price gains by the biggest cryptocurrency. Read more.