Bitcoin (BTC) as a Safe Haven: The Idea Is Coming Back into Favor

Regardless of Friday's declines, which have just brought Bitcoin back below $8,000, the global economy is in serious disarray, and it's only going to get worse.

Despite Friday’s losses, which brought Bitcoin back below $8,000, the global economy is in deep disarray, and it’s set to get worse.

Central banks are pumping funny money into markets, interest rates are turning negative, and GDP figures are crashing. But is BTC still a safe haven in times of financial turmoil?

The US national debt now stands at almost $23 trillion, and the central bank continues to print money and buy assets in a process known as quantitative easing. The Fed is lending money to banks to pay off short-term debts as cash reserves slowly dry up.

These repo operations are set to continue, with interest rates likely to fall even further under pressure from President Donald Trump himself.

Cameron Winklevoss highlighted in a recent tweet that there are currently vast sums of money tied up in negative-yielding bonds. This is “why you should own BTC” – according to the young entrepreneur.

A little over a decade ago, banks crashed the world’s economy in one of the worst financial crises in history. Banks simply cannot be trusted, which is partly why Bitcoin was created – or so cryptocurrency proponents might argue today. And they’d be right!

This week, China pumped $28 billion into markets. In this artificial way, they try to save an economy that is already showing signs of slowing down. Today, the country’s GDP figures were also released, showing the slowest growth in 30 years.

In the background is an escalating trade war with the US and a general souring of market sentiment in the world’s second-largest economy.

That’s not all. Brexit is on the horizon, perhaps to be followed swiftly by new problems for the European Union. The situation in the Middle East threatens to drag the world into a wider conflict.

All of this has contributed to problems in the global economy, with the IMF warning this week that world growth is set to hit its lowest since the international financial crisis.

Bitcoin Price and the Safe Haven Narrative

In times of uncertainty, people don’t want to be exposed to their government, and especially not their banks. So the narrative of Bitcoin as a safe haven does come back into play.

“Bitcoin was an overreaction to the financial crisis and the monetary system that permitted it,”ксперты сказали. "Today, rather than functioning as an efficient peer-to-peer cash transfer system, BTC is evolving into a store of value like gold.”

So perhaps BTC won’t become the medium of exchange in the future, as Satoshi Nakamoto intended, but rather a new type of store of value? We’ll find out soon enough as the world’s economy hits another bump in the road.

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