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Bitcoin Shows Strong Correlation with Other Safe Haven Assets

The recent tension between the U.S. and Iran did not only inflict fear of yet another devastating war and disruption of world’s peace, but also reflects something interesting in the Bitcoin market we have not seen before.

Prices of gold, silver, and oil have seen a major run up amidst tension between the two parties. However, after the U.S. President Donald J. Trump addressed the nation, instead of aggression, he merely threaten Iran with additional sanctions and called for diplomacy measures to find a way out of this brewing conflict. The diplomatic attempt by the U.S. lifted investors’ worries and quickly de-escalated the situation, resulting in stock market rallied and sudden drop of prices in other front-run safe haven assets.

Image Source: Twitter @rewkang

Bitcoin despite often viewed as immature and highly volatile asset. The recent price action has showed a very strong correlation with other safe havens such as gold can be defined as extremely bullish case for Bitcoin. To see the similarity of market reactions in Bitcoin, passing its 11th Birthday recently, with over 40,000 year-old store of value like gold was a huge development in credibility and soundness of this digital asset.

Even with the U.S. stock markets making their all-time highs. This might very much be the result of FED pumping more dollars to the markets and stocks buyback subsequently artificially inflates the prices. Well-informed investors and economists who have shared the same worries and doubt of its sustainability, might start looking toward Bitcoin and other digital assets to hedge against fiat currency in the future.

If this cycle continues to happen, Bitcoin will continue to appreciate and firmly place its foothold on the spot of safe haven asset. Eventually even the most skeptic will not be able to decline Bitcoin’s quality as the store of value.


Related Article: Is Bitcoin Really A Safe Haven Asset?

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