Is Bitcoin a refuge value?
Many consider Bitcoin as the digital ’Digital Gold’ ’; But is Bitcoin really a refuge value today? Find out here.
With each passing day Bitcoin becomes stronger; its qualities make it the first place among the cryptocurrencies with the highest market capitalization.
The mother of the entire cryptoactive ecosystem was designed to become the best means of payment, to perform any type of transaction that may occur on a day-to-day basis; However, it is currently used as a speculative asset and refuge value.
Can I use Bitcoin as a refuge value?
Although every day is more accepted as an active refuge, Bitcoin is not the best place to safeguard funds, for now; Then we explain why. There is no doubt that Bitcoin offers great potential; However, it will take a good period of time for you to achieve your main goals.
To achieve its main objective, what it least needs is to be a speculative asset; and it is precisely what is most used today. The main objective of Bitcoin is to become the best alternative to cover the great weaknesses of fiat money, mainly in a world where the Internet is gaining more and more space in our daily lives.
To do this, BTC uses a decentralized P2P network that eliminates intermediaries; a platform that lives on the internet and therefore makes it an international currency. In this way we hope to see it as a popular means of payment, but not as a refuge value; But what if it becomes both?
Some of the features it offers to become an excellent refuge of value are: Decentralization, high security, deflationary nature, liquidity. Currently the massification of Bitcoin is not enough to say that the goal has been achieved, there are many obstacles that have had to face; It is not for less, governments are not very interested in decentralized currencies, they need to be in control, however, cryptocurrencies may not be so far from dethroning fiat money completely.
Every day that passes, Bitcoin becomes stronger; and not necessarily for its price, but rather for the expansion and acceptance it has obtained in recent years. During June 2019, Bitcoin managed to exceed USD 13,500 after excellent performance throughout the year. This situation is attracting new investors, who primarily treat the alpha currency as a refuge value amid a turbulent global economic situation.
Although at present the movements of the BTC are not highly correlated with those of the Gold, throughout this year we have been seeing a considerable increase in this interesting correlation; especially on specific occasions.
While in early August Gold rose to the psychological level of $ 1,500 per ounce, another asset followed in its footsteps, Bitcoin. According to an analysis by Bloomberg, the correlation between Bitcoin and Gold has gone from 0.496 for last year, to a maximum of 0.827 for May of the current year.
To understand the correlation between assets, a coefficient of 1 indicates a perfect correlation, while -1 indicates a perfectly opposite correlation.
The excellent features of BTC; In many ways, better than Gold, it has caused it to be positioned as a good refuge value, mainly in the current uncertainty environment.
The tension between the United States and China, a confusing Brexit, and large economies of the world in slowdown are some of the signs that lead merchants to think of a possible economic recession. However, Bitcoin is not yet a refuge value par excellence; section where gold predominates as storage of wealth with thousands of years of history.
Using the TradingView comparison tool we can verify that there is still no reliable correlation between Gold and the BTC.
If we begin to observe a potential increase in the correlation between Gold and Bitcoin, one might think that Bitcoin has already taken a predominant place among humanity’s best refuge values.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.