One thing is certain: Bitcoin is evolving as a solid non-correlated asset.
We have seen this with increase in demand, much more than gold, in countries that have experienced inflation.
The transference of value to BTC not only flows in during times of inflation but also when the fear of a war envelopes the world. War of trades and/or might brings people looking for a safe haven to bitcoin.
This became evident when Bitcoin made moves in countries like Venezuela and Argentina that were plagued by inflation. Similar moves were observed when China and the USA went into trade war.
Now that the USA has officially shook the hornet’s nest by killing the Iran’s Major General Qassim Suleimani, Bitcoin price shot up in anticipation of escalations between the two nations.
Price retraces as Trump de-escalates war threat
The confirmation that the surge was a direct result of fear of war became evident when price retraced to low $8000 after Trump confirmed not to take any retaliatory action against Iran following strike on two US air bases.
Google’s search trend confirms the connection
Bitcoin’s sentiment has long been associated with the google search trends. During this week the search term ‘bitcoin Iran’ saw a steep surge of 4500%. This eventually reflected in the price.
Best Alternative to gold?
While gold has been seen as a safe haven for centuries, when a country goes to war – it is literally impossible to move physical gold across borders due to restrictions by governments. Even if you manage to transport the gold it will be rather difficult to liquidate it without raising eyebrows.
With Bitcoin, there is no cost to move it with you wherever you go. Given the recent trend, it is now recognized in most major economic locations.
Government can seize an individual’s gold or cash or bank account but bitcoin is generally immune to such coercion.
Things working in favor of Bitcoin
As a safe haven, there are a number of things working in Bitcoin’s favor:
- Extremely limited in its supply, gold cannot claim this
- Huge upside potential of the technology itself
- Relatively untapped market
- Big players, including Fidelity, made entry to this space recently
- Easy to hold, preserve, carry
- Immune to seizures
- Easy to exchange without an intermediate party
- Truly Borderless and global currency
- Technologies like 5G will need a borderless, intermediary free currency like Bitcoin for seamless interaction of various parties interacting on the network
Things that work against Bitcoin
- Better alternatives keep hitting the market
- Uncertainty of future legislation and adoption
- No recourse in case of a hack or theft
By the time we enter into the new decade in 2021, we will definitely see a new era of 5G evolution and Bitcoin (and blockchain) will play a pivotal role in a truly autonomous economy.
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