Bitcoin Is Now Being Seen as a Safe Haven Asset, Analyst Argues

Francisco Memoria

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.

Crypto Market Update for 24 February 2020: BTC, ETH, ADA, and TRX

Siamak Masnavi

This article provides an overview of how Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and TRON (TRX) have been doing over the past 24-hour period, and covers recent news that might have affected their prices (or might do so in the future).

To give you a rough idea of how well the crypto markets are doing today, 18 out of the top 20 cryptoassets (by market cap) are currently in the red (against the dollar).

All market data used in this article was taken around 10:00 UTC on 24 February 2020 from CryptoCompare, which also provided the price charts shown in this article.

Bitcoin

BTC-USD 24 Hour Chart on 24 Feb 2020.png

BTC-USD is trading at $9,715. This means that the Bitcoin price has been under the $10K level since February 20. Still, Bitcoin has still managed to gain +37.60% against USD in the year-to-date (YTD) period.

As for why Bitcoin is having trouble breaking through the $10K level, one theory is that Bitcoin is currently being seen more as a "risk-on" rather a "risk-off" asset; another is that Bitcoin whales are manipulating the market.

Here is prominent crypto analyst/trader Josh Rager with some technical analysis of Bitcoin's latest price action:

Ethereum

ETH-USD 24 Hour Chart on 24 Feb 2020.png

ETH-USD is trading at $265.99. Although ETH-USD has dropped 0.92% in the past seven-day period, for the YTD period, it is up +103.37%.

Cardano

ADA-USD 24 Hour Chart on 24 Feb 2020.png

ADA-USD set a six-month high on February 14 when it hit $0.07083. Since then, it's been going downhill.

Although the 7-day and 10-day pictures look bad, Cardano's return-on-investment (ROI) figures (against USD) for the 30-day, YTD, and 90-day periods look quite decent, being +36.99%, +76.77%, and +60.44% respectively.

On February 21, IOHK tweeted that the Cardano network had successfully carried out a scheduled network upgrade (a hard fork) to bring in Ouroboros BFT (a new consensus mechanism):

 TRON

TRX-USD 24 Hour Chart on 24 Feb 2020.png

TRX-USD is trading at $0.0204, which means that TRON is currently the 16-th most valuable cryptoasset by reported market cap.

TRX-USD has dropped -6.35% in the past 7-day period, but so far in 2020, it is up +54.45%.

Earlier today, in an article for Coindesk, Alexander S. Blum, the Chief Operating Officer of crypto finance firm Two Prime, wrote:

"Viewed through the lens of traditional finance, TRON is acting pretty predictably. It is acquiring more market share through the acquisition of weakened competitors, like BitTorrent, and their networks while promoting their retail financial product. They’re performing a balancing act between being a financial product and a technical one...

"Justin is leading TRON as a for-profit business pretty well. Why does that irk many hardcore developers? For those in the Western world sticking up their noses at TRON, it’s worth reflecting on how deeply elitist it is to judge from a position of pure technical idealism...

"The emergence of TRON in highly competitive Asian markets is commendable. They are pioneering a new business model and creating wealth ex nihilo – out of thin air – because they focus on what works today. Their users share the company’s pragmatism. TRON, EOS and Ripple are pioneering community-centric financial products that offer exciting new models for wealth creation."

Featured Image by "AhmadArdity" via Pixabay.com