According to a recent case study, Bitcoin (BTC) could be used as a hedge against financial instability.
According to a recent case study conducted by the digital assets investment firm Grayscale Investments, Bitcoin (BTC) could be used as a hedge against financial instability.
The study takes a look at the recent trade hostilities between the United States and China to show how Bitcoin has outperformed traditional currencies in the midst of this economic uncertainty. The study suggested that:
“With continued adoption, Bitcoin represents a transparent, immutable, and global form of liquidity that can provide both wealth preservation and growth opportunities. As a result, we believe it deserves a steady strategic position within many long-term investment portfolios.”
But what sceptics says?
Brian Belski, chief investment strategist at the investment banking company BMO Capital Markets: “Bitcoin has been excessively volatile, especially the last couple of years. It’s the sexy kind of thing to go to now. I don’t base my investments on sex appeal. I base my investment on longer-term perspective. And I think the longer-term perspective, in terms of Bitcoin being that safe haven, I think it’s way too soon to call that.”
Another report from Matt Egan of CNN Business indicated that many investors are rushing towards traditional assets like government bonds and gold as a hedge in these difficult times:
However, the bonds are showing negative yields, and gold prices are already at a six-year high.
A Danish bank is offering mortgages at a 0,5% negative interest rate. “Nice Bank” you think? Well yes and no. Maybe yes for borrower but not for the financial system. There is no free lunch. Banks also charges a lot of different costs regarding credit action, so you would be lucky to get close to the 0%. For you that’s OK, but this means that banks are exchanging long term payoff from interest for the short term payoff of fees. This implies, that banks are desperate for quick cash. Hmmm, are you still worry free?
“But cryptocurrencies are so volatile” you said. Well yes, but fiat currencies are not immune of that also. Let the pictures speaks for me.
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