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The Ultimate Safe Haven

Posted 2/28/22 by Spencer Schiff

People who are antag­o­nistic towards bitcoin have recently been calling atten­tion to how it seems to behave as a risk-on asset. Its price declines when uncer­tainty increases, and rallies when the uncer­tainty abates. This asser­tion is under­lined by the obser­va­tion that bitcoin has been corre­lated with high-beta tech stocks, and inversely corre­lated with “safer” invest­ments. This FUD came to a crescendo when Russia attacked Ukraine on Wednesday night. Immedi­ately after the invasion began, tradi­tional safe havens surged in value while bitcoin tanked.

However, this does not reveal anything about the funda­men­tals. Current price action doesn’t reflect what bitcoin is; it only reflects how traders perceive it. This distinc­tion is impor­tant because percep­tions can change, and in this case, they likely will. 

The Dollar vs Bitcoin

If bitcoin becomes the global reserve currency, it’s reason­able to assume that it will be widely recog­nized as a safe asset. After all, there’s a sense in which holding cash balances is a hedge against uncer­tainty. This applies to everyone, from ordinary people who want to prepare for unexpected emergen­cies, to large fund managers who boost their cash alloca­tion if they fear a market correction. 

This does not mean bitcoin will be viewed exactly as the U.S. dollar is today. It will actually be consid­ered to be the safest asset in human history, thanks to its resis­tance to debase­ment, censor­ship, and confis­ca­tion. This property can be especially attrac­tive in the face of geopo­lit­ical tensions such as those being experi­enced today. There­fore, in “risk-off” market environ­ments, the purchasing power of bitcoin will increase relative to other assets. This rise will have similar dynamics to how the dollar currently appre­ci­ates during times of uncer­tainty, but likely in a more pronounced way. Bitcoin will be viewed as the ultimate safe haven.

The best way to prepare for this future market environ­ment is to ensure that you have some bitcoin, right now.

This blog offers thoughts and opinions on Bitcoin from the Swan Bitcoin team and friends. Swan Bitcoin is the easiest way to buy Bitcoin using your bank account automatically every week or month, starting with as little as $10. Sign up or learn more here.


Spencer Schiff

Spencer Schiff

Spencer Schiff is a Research Analyst and Educator at Swan Bitcoin. He is a former goldbug, turned Bitcoin advocate. For years now the well known economist and goldbug Peter Schiff has continuously spoken out against Bitcoin. His son, Spencer, has taken the other side of that argument and continues to present ground breaking research to prove why Bitcoin is the ultimate asset to own in today’s world.

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© 2022 Swan Bitcoin

Electric Solidus LLC
26565 Agoura Rd Ste 200
Calabasas, CA USA
hello@swanbitcoin.com
+1.218.379.7926

Swan Bitcoin does not provide any investment, financial, tax, legal or other professional advice. We recommend that you consult with financial and tax advisors to understand the risks and consequences of buying, selling and holding Bitcoin.