Spencer Bogart, General Partner of Blockchain Capital Foundation, shared his thoughts with Bloomberg on the version that Bitcoin can play a role of a safe asset in case of a collapse of the world financial markets.
In Bogart's opinion, Bitcoin can indeed become such an asset in a certain context. "I think Bitcoin will definitely be a safe asset in the long run. It follows a perception curve, and so we can see its development. Now it is at an intermediate stage, where it is necessary to assess the risks and their severity," said the entrepreneur. - When there is a risk of losing money, things like Bitcoin certainly seem very attractive. I think that's what has been a major driver of the recent price hike.
At the same time, Blockchain Capital's partner invites market participants to think about alternative scenarios of the situation: "If we talk about a really serious crisis, the collapse of liquidity, another global financial crisis, I think that Bitcoin will have hard times from a price perspective.
Secure assets are assets in which investors tend to seek salvation during economic turmoil. As a rule, they are less risky. Analysts of The Block previously noted that Bitcoin may not be the type of asset with which investors will save their money in the described scenario. They came to such a conclusion by comparing the volatility levels of Bitcoin, U.S. government bonds, gold and some other assets, where the average 30-day values for the last 5 years were 12.4%, 0.5% and 2.5%, respectively.
As an additional factor, they point to the fact that Bitcoin, traditionally regarded as a non-correlated asset, has become increasingly correlated with the Yuan amidst the trade war between China and the United States.
In July, Bogart explained the fluctuations in Bitcoin's exchange rate by "the natural behavior of any asset class with limited supply and volatile demand".
What do you think steemians will bitcoin safe us in crisis? or it will go down too?
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