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The myth of Bitcoin being a safe haven is busted as Russia goes to war

With the worst fears coming true after Russia attacked Ukraine, the ripples of the same are being felt across the financial markets the world over. The ensuing geopolitical tensions are taking a toll on the cryptocurrency market with Bitcoin entering a phase of free fall. The same applies to the equities market as well even though gold prices have seen a steady increase in its price. Besides, oil, base metals, and agriculture commodities too have seen an increase in their price. The US dollar and the Japanese Yen too have been going northwards and have seen their stature grow as currency market safe havens.

Coming back to Bitcoin, its steady downfall has been a concern for those who have been pegging it as a safe haven that is insulated from the turmoil in world politics and other happenings. Many have been claiming cryptocurrency is a safer bet than gold for stashing currency. However, that seems to have been quelled for now at least and that is being blamed on the emergence of institutions and other players who trade stocks. This has led to the cryptocurrency having a similar characteristic as stock and showing similar traits.

Also, with fiat safe havens emerging as a better bet than bitcoin is also proof of bitcoins, or for that matter crypto as a whole isn’t as safe an inflation hedge as was being perceived. However, it was just that and indeed a safe haven asset but that was before the crash due to the covid pandemic. That was also the time when the presence of institutions in the segment was almost nil. However, as things stand now, Bitcoin could soon be seen settling at around the $30,000 mark after reaching a high of $43,000 just weeks back.