Bitcoin, the best shelter for your money?
In this article we try to answer an important question for the crypto industry: if Bitcoin really is the best refuge for your money.
Crypto enthusiasts have long claimed that Bitcoin is the safest shelter for people’s funds. But how true is this? In this article we will try to answer that question.
The idea of Bitcoin and the rest of cryptocurrencies is to offer an alternative to centralized national currencies. Therefore, in case of an extraordinary event, such as an economic crisis or the devaluation of some currency, people could retain the value of their savings.
However, this could not be verified until a situation like that occurred. Of course there is the case of Venezuela, where the population is using Bitcoin as a way to escape from an economy in crisis and a weak currency. But being the example of a single country and not a general world situation, there are still doubts about whether cryptocurrencies are the safest way to conserve your money.
Until a few days ago, the opportunity came that was about to prove this point: tensions between the United States and Iran.
United States, Iran and Bitcoin
The relations between the United States and Iran have been marked by strong periods of tensions for years. However, the events that have taken place so far in 2020 marked such a high point that the world believed that they would engage in armed conflict.
The turning point on this occasion was the murder of Iranian General Qassem Soleimani, which was ordered by US President Donald Trump.
After this, both Ayatollah, Ruhollah Khomeini, and the president of Iran, Hassan Rouhani, said there would be serious consequences for the United States for their actions. Days later, Iran carried out a missile attack on two US military bases in Iraq.
At this time, internationally there was a real fear of a possible war between Iran and the United States. And there was not only concern about the violence or casualties that it could cause, but about how it would affect the markets.
There was a special fear that the dollar would be devalued and, consequently, large investors would lose significant sums of money. And it is here that Bitcoin makes its appearance.
At the time of tension while waiting for the United States response to the attacks on its bases, the price of commodities, such as gold and oil, increased. And not only that; Bitcoin price did too.
This shows that, at least in that moment of uncertainty, the world population considered the cryptocurrency as a safer haven than the dollar to save their money.
However, the armed conflict was not carried out. As soon as Donald Trump showed that he had no real interest in starting a war with Iran and alarms about it began to decrease, so did the prices of the commodities mentioned. And so did Bitcoin.
This is enough?
The big question is: is this demonstration of strength enough for Bitcoin? The answer may vary depending on who is asked. Crypto enthusiasts say yes. Some economics experts say no.
But there are arguments that are considered more complete than others, such as that of economist Campbell Harvey, who gave his opinion in an interview for CoinTelegraph.
Harvey said that, like gold, when a situation with a high political risk occurs, cryptocurrencies could be considered as a safe haven. Especially because they are decentralized, which would give assurance that no government or entity would have control over their money. And that in fact this theory could be verified with the recent situation between Iran and the United States.
The big problem is that the Bitcoin moment as a “safe haven” was very short. So it is normal that doubts arise about whether it really is a good refuge for money or if it was just a coincidence.
For now the opinions are still quite divided, so we will have to wait for another opportunity in which Bitcoin demonstrates if it really can be a safe haven for money.
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.