Chris Reinertsen, the chief marketing officer of Rhythm Technologies, has recently argued bitcoin is now being treated as a safe haven asset by investors looking to hedge against global uncertainties.
Speaking to Forbes, Reinertsen revealed he believes recent developments in the U.S.-China trade war raised global uncertainties and led various investors to bitcoin, in an attempt to ensure their cash will be safely stored in case things turn south.
Recently China devalued its fiat currency, the yuan, to an 11-year low against the dollar. This is the country’s response to tariffs imposed by the Trump administration. Weakening its currency sees China offset some of the tariffs’ impact.
The move saw equity markets drop significantly amid fears the trade war could keep on escalating. Per Reinertsen, some turned to bitcoin.
There is a flight of capital to safe-haven assets across the board, which now includes Bitcoin. Throughout the last few years, we have been seeing the trend of Bitcoin increasingly becoming fundamentally correlated to more macro moves as increased economic uncertainty in the world increases.”
Traditionally, U.S. Treasuries, gold, and the Swiss Franc are seen as safe haven assets. Bitcoin being seen as a safe haven is, to some, part of the cryptocurrency’s path to become “gold 2.0.” Reinertsen noted that the “correlation has not been fully established yet,” his firm noted bitcoin rallied amid a major market downturn this week.
He added he believes “we are going to see more capital flight to Bitcoin in the near future.” Other analysts seemingly agree with Reinersten, as Don Steinbrugge, for example, recently told CNBC “some people are using it [bitcoin] as a way to hedge against inflation.”
Steinbrugge , the CEO of consultancy firm Agecroft Partners, argued that bitcoin “is going to be here for a long time and I think long term it will be a part of a lot of hedge funds’ portfolios.”
Keith Hilden, the founder of Relex Capital, didn’t buy into bitcoin’s rise being related to yuan’s devaluation. Per Forbes, he revealed he believes BTC’s price spike was related to speculation as markets try to find an equilibrium.