Bitcoin’s Safe-Haven Status Is Being ChallengedSeptember 10, 2020
Many refer to Bitcoin as one of the safest methods of payments. It is a modern currency, offering its users one of the greatest conditions on the market. In the cases of political turmoil and financial uncertainty, it is noticeable that the more investors are hitting the market, trusting bitcoin with their funds.
It is safe to say that the Bitcoin managed to take a lead in many fields. It is actively used in most of the countries around the world, and countries like Australia and Japan are trying to develop the currency even further by adopting regulations that provide the users of crypto a safer environment.
Bitcoin Forex brokers, for instance, are using crypto very actively. Traders now have the opportunity to use crypto as their currency of choice. It is very interesting to trade crypto since its price changes very fast. It takes a lot of attention and you should always use a risk management strategy. Forex trading, in general, is very popular around the world. To say it the easiest way, it is selling one currency, while, at the same time, buying another one.
There are hundreds of fields where crypto is used today, they include everything from casinos to trading companies. Bitcoin is actively referred to be the safe-haven place when it comes to different currencies, but there are many things to be considered before giving it the status.
It is a fact that crypto is more trustworthy than other regular, government-issued currencies. Bitcoin offers users less waiting time, secure and private environment and many other positive things, but in today’s ever-changing world, it is very hard to call anything safe.
Crypto still has a very long way to go, and many things can change along the way. There are some risks that you need to keep in mind before deciding to invest in crypto, and you should always be ready for some not so successful outcomes.
One of the things that Bitcoin really lacks to be referred to as the ‘save-haven’ is that it simply is not predictive. In some cases, it was able to respond to some problems the same way as, for example, gold did. But in other cases, it fell like other currencies.
The thing is that the price of crypto is always changing. 2017 is a very good example of that. Bitcoin started 2017 with the price of only around $1,000, at the end of the year, its price hit the highest mark that it ever had, $19,783. But this was not for long, after some time the price started to drop, causing a lot of investors to lose a lot of money.
When it comes to crypto the most important thing to remember is that you need to be careful. You never know how the prices can change, but having a piece of information about the market can help you a lot.
But the thing is that none of the currencies is a sure thing. You never know how they might change, so there is a risk for everything. But when it comes to crypto, the risk is a lot of higher because of its high prices. But it does not mean that Bitcoin is bad, in fact, if you work smart enough, it is the best available currency in the world. But it still can not be given the ‘safe-haven’ status just yet.
Like many other markets, crypto was also hit by the novel coronavirus. Though many have thought that Bitcoin would continue rising, as it was reported, it first came down to about $9,000, and now stands at an even lower point.
The economic impact of coronavirus is severe, and it has already done some bad in the global markets. But, it is not a direct threat of the government’s malfeasance or incompetence. This can mean that bitcoin can be severely affected by the growing health concerns, which in no way makes it a ‘safe-haven.’
However, it should also be noted that during the US-Iran conflict, Bitcoin was able to go upwards with 21%. Though this can mean that the currency can go upwards while other economies are going down, the fact that coronavirus resulted in the losses can in no way be ignored. So, for today, Bitcoin can not be referred to as ‘safe-haven’, but as it develops, and becomes more active and popular in even more markets, it could somehow get there.
While crypto is showing to be unstable, gold stays the real ‘safe-haven’.
While worries of Coronavirus spreading to more countries continue to rise, the whole cryptocurrency market, as well as the global markets, have endured a rapid sell-off. Gold is actually one of the few investments that have reported gains that reflect its safe-haven position.
It has been proven many times that Bitcoin shows off its greatest assets when it comes to risks created by the government and the poor economic policies. But in some cases, it is as vulnerable as many other currencies are. Giving it a ‘safe-haven’ status is impossible to do because of today’s situation. But, the currency has a long development way to go, and maybe one day it can stand next to, for instance, gold.
When it comes to crypto it is very important to remember that there are times when the prices can fall or rise without any previous signs. It is vital to be ready to face some risks when using crypto.
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