As the pandemic continues to spread and the stock market continues to rise, investors are increasingly worried that a collapse is imminent. As a result, some are turning to so-called “safe havens” such as gold and even Bitcoin. A prominent business advisor is now realizing that there are currently several “worrying signs” plaguing the market.
All eyes are on Bitcoin and gold
The ongoing pandemic has led to a catastrophic decline in employment worldwide, forcing central banks to unleash their money printers at an unprecedented pace. Bitcoin investors and the “gold bugs” in particular are very critical of this development. In your opinion, this is once again a reason why investors should place more emphasis on “hard assets” that are underpinned by scarcity. Gold has established itself as a safe haven over several decades, but whether Bitcoin is able to perform well in a downward macroeconomic trend could soon be put to the test.
Can Bitcoin establish itself as a safe haven in times of crisis?
Although Bitcoin did not live up to its safe haven status in late February and early March, it nonetheless has the chance to prove itself against the backdrop of an ongoing economic downtrend. According to a recent Arcane Research report, the two investments, although Bitcoin is incredibly volatile than gold, have given investors similar returns over the past two years. The report says: “Looking at a two-year window, Bitcoin has more or less the same return as gold, but was significantly more volatile.”