A recent report has found that bitcoin, the flagship cryptocurrency, has seemingly started to have like a store of value, and is “potentially being used” as a safe haven asset.
The report, published by Digital Asset Data and first covered by MarketWatch, digs into the price performance of bitcoin, gold, and the S&P 500 index over the past 90 days. It shows the flagship cryptocurrency “moved in tandem with gold” and “swung inversely to moves in the stock market.”
It reportedly digs into why the price of bitcoin has seen a significant slump this week and is currently trading below the $10,000 mark, while the S&P 500 is up around 1.8% over the last five days. Similarly the Dow Jones Industrial Average (DJIA) rose about 1.7% in said period.
Digital Asset Data’s report focused on the price of BTC against the US dollar, and compared it to the SPDR S&P 500 ETF Trust (SPY) and to the SPDR Gold Shares ETF (GLD). While bitcoin’s performance this week has been less-than-stellar, over the report’s period the cryptocurrency, just like gold, outperformed the S&P 500.
Ryan Alfred, president of Digital Assets Data, noted the correlation may not be statistically significant, but made a case that it shows there’s evidence bitcoin is maturing as an asset. He said in statement:
The findings tend to signal that Bitcoin is starting to behave more like a store of value and is potentially being used as a safe-haven asset during global uncertainty in traditional markets.
Bitcoin investors have often looked at the cryptocurrency as a potential safe haven that’s uncorrelated to other assets, and is therefore an alternative to traditional securities. This month as tensions between the US and China intensified and led to fears the trade war could keep escalating, bitcoin’s price surged.
The surge saw Chris Reinerstsen, the chief marketing officer of Rhythm Technologies, argue the flagship cryptocurrency was now being treated as a safe haven, as investors were using BTC to hedge against global uncertainties.
Others point out bitcoin’s properties position it as “gold 2.0,” as its digital nature give it an advantage over the precious metal, which is historically seen as the go-to safe haven. Tyler Winklevoss, the CEO of the Gemini cryptocurrency exchange, has noted he believes it can challenge gold, which has a market cap of around $7 trillion.