Is Bitcoin a safe haven like gold and diamonds? The experts are talking

Recent health and geopolitical events, such as the Covid-19 pandemic entering its third year, and above all, the start of The conflict between Russia and UkraineIt has prompted many savers to ask themselves the best way to invest their hard-earned money over the years. One of the most common concerns among those related to the war and its economic consequences is that rising inflation could affect savings The collapse of the true value of the currency and reduce the size of our sacrifices.

This is why we hear more and more about safe haven assets, or “safe haven“For English speakers, that is, those assets into which one must cast oneself to maintain the value of the investment. Gold is one of the most popular safe haven assets, but some, especially in recent months, have developed the idea that Bitcoin can also be thought of as such.

Is Bitcoin worth more than gold?

First, let’s try to identify the origins of the safe haven: by this we mean a Good with intrinsic value Which tend not to lose even as a result of inflation and a general increase in prices.

Examples of safe assets include gold and other precious metals, such as silver and platinum, but also diamonds, real estate (at least where there is no speculative risk), currencies and government bonds of virtuous and financially stable nations. But for many digital market experts too Cryptocurrencies can be considered safe assetsalthough it is atypical with respect to the above.
We know cryptocurrencies are more volatile than gold and diamonds, just as the drop in bitcoin at the start of 2022 or the recent 20% crash of the DeFi Fantom ecosystem shows. However, many investors take it Move away from traditional safe havens To invest in cryptocurrencies for a number of reasons, first of all to lower the price of gold in parallel with other commodities.

Since the outbreak of the war in Ukraine, the price of gold has clearly increased with high rates of inflation, but in percentage terms it exceeded the prices of other commodities.

Now, therefore, those who invested in valuable assets in the hope that they would be protected from inflation fear that Inflationary galloping causes gold to lose its value Compared to the pre-war level, values ​​have been adjusted for inflation, which is more unique in the financial history of the commodity than rare.
To avoid suffering huge losses, investors began to diversify their assets, moving to other safe havens, and for the first time among those involved in traditional finance, to cryptocurrencies.

According to Bocconi University Vice President Stefano Caselli, who was interviewed by Corriere della SeraThis depends on the fact thatIn the face of war and the resumption of inflation [grafico sottostante]And It looks like you Markets wanted to diversify safe haven assets“.
This does not necessarily mean that cryptocurrencies have become the first choice of investors: on the contrary, in the United States, where the propensity to take risks and invest in the cryptocurrency market is very high, large savers threw themselves first on real estate, then on government bonds and on the dollar and later Only on digital currencies.

Among the cryptocurrencies, according to market experts, Bitcoin is the closest thing to a safe havenalthough it is difficult to understand the reasons for this definition.
Sure, the cryptocurrency has maintained a high value, net of recent period fluctuations, but it’s hard to think that it can meet the definition of “”Good, high intrinsic value“.
If anything we can say it Inflation affects cryptocurrencies less than other assets, so Bitcoin and the company are emerging as much safer investments (again, net of inherent market volatility) at a historical moment when inflation clearly appears to be rising.

Despite this, there are many opinions of those who believe that Bitcoin can do just that safe haven In a market where I am Traditional Safe Haven Assets May Be Less Safe is expected.

From global and non-politicized currencies

to comment on the topicBitcoin as a safe haven“It was at the end of 2021, so before the collapse and the war in Ukraine, billionaire investor Mark Cuban, who described it as”Cryptocurrency safe havenBelieving that the coin created by the mysterious Satoshi Nakamoto will sooner or later become Digital equivalent of gold.

Cuban’s analysis, which appeared in an interview with CNBC, makes it clear that it is not the intrinsic value of Bitcoin that makes it a safe haven, but the fact that Quantities are limited and restricted by an algorithm which organizes its production in a predetermined way, which makes it impossible to develop “Bitcoin inflation(To learn more, it may be helpful to learn more about how Bitcoin works.)

Moreover, according to Kobe, the coin also has a second coin”Big advantage over other cryptocurrencies: it has no competition“In these words, the billionaire means that there are no coins that can compete, in terms of market size and popularity, with Bitcoin. It may allow the latter to become, in a couple of years,”Best value store in the market“. A similar argument also applies to Ethereumalbeit on a much smaller scale.

Meltham Demirors, Chief Strategy Officer (CSO), shares Cobain’s same optimistic approach, who has made it clear, though for now that Bitcoin is not a true safe assetIt could be the conflict in Ukraine that makes this so.
Demirors’ analysis is based on the fact that in different parts of the world, for the first time since Greek ATMs lowered their shutters in 2014, Citizens’ access to their savings is not always guaranteed Through traditional banking methods.

Examples of CSOs for CoinShares are basically three: the example of Russia’s removal from Swift, the international payment system, the end of Russian support for Visa and Mastercard, both of which are related to the war in Ukraine, and the international payment system. Canadian truck drivers protests.

The latter, in fact, threatened the supply of goods on the country’s store shelves with their strikes and prompted Prime Minister Justin Trudeau to impose a state of emergency, freezing Protestant assets and fueling the debate over cryptocurrencies as an alternative to traditional banking.
If what we face is the future that Access to money is governed by political decisionsDemirors explains, that cryptocurrencies, with their decentralized and democratic systems, can succeed in what traditional banks can no longer do, i.e. ensuring that citizens have access to their net savings from any political interference.

Let it be clear That the demeror is not a cause of health Or not, international sanctions against Russia or freezing of Canadian truck drivers’ bank accounts.

It can be taken, more than anything else, as a simple acknowledgment that, in many increasing cases, Access to money is restricted for non-financial reasons, which creates problems for uninvolved people in some circumstances. The same reasoning has been suggested by Binance and Coinbase about closing their territory in Russia exchangewhich would jeopardize more than anything else the savings of the weakest and not the savings of politicians and oligarchs.
Likewise, Demirors explained that “I think what we’re seeing is a growing awareness that, for the first time, the people, the citizens who are the real victims of the wars of the great powers, have an alternative option. Bitcoin and Other Cryptocurrencies Are Gods Global and depoliticized currencies“.

Safe haven in the middle of the road

Demirors and Cuban’s arguments make sense, but they do not explain why a Westerner (Italian, for example) should invest in cryptocurrency, or why they would prefer cryptocurrency to diamonds or a home to resell or rent.

In fact, Demirors’ speech collapses as There is no reason to fear political interference In accessing savings deposited or invested in the national circuit of banks, or where the democratic form and financial health of the state are not in question, as is the case, at least for the time being, in a large part of the western world countries.

Cuban, on the other hand, defines Bitcoin as “Cryptocurrency safe havenAnd he is right: surely who is looking for him Strong Origin in Cryptography It will more easily turn towards Bitcoin, the most traded and most popular cryptocurrency, rather than any Alt currency.

However, also Bitcoin remains highly volatileSo, on a perfect measure of safe haven assets, they rank well below commodities, valuables or real estate, unless they are in a similar situation to what happened in the US housing bubble in 2008.

There are many studies published at the beginning of the epidemic that explain how Bitcoin still has a lot of fluctuations in value to be considered a safe havenincluding research from Qingdao University, China, or the paper by two researchers from Smurfit Gradute Business School from University of Dublin.

In short, although the academic world remains skeptical about cryptocurrencies as potential safe havens, many investors and experts do consider them to be. Store as valuable as gold and diamonds.

If there is one country where Bitcoin can prove to be a very useful safe haven, it is Russia. On the other hand, the ruble is collapsing under the weight of international sanctions, while the availability of dollars in the country has again diminished as a result of the Kremlin’s entry into the war against Ukraine. In a similar vein, Benjamin Dean, director of digital assets at WisdomTree explains, “Cryptocurrency becomes an attractive alternativeBecause the economic system and the local currency are collapsing, but the dollar, US Treasury bonds and gold are also not available“.

This exact sentence gives an idea of ​​what Bitcoin’s role as a safe haven should look like, even in the eyes of a Western investor Half a safe havenwhich is an investment that should be made only with the aim of diversifying assets and certainly not as a main shelter for one’s savings.

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