If you bought $100 worth of bitcoin in 2010, it would be worth $88 million today. Bitcoin was worth 0.003 cents in 2010. But the future can't be predicted, and the path to successful investing is not simple. For those not intimately familiar with cryptocurrency,…
If you bought $100 worth of bitcoin in 2010, it would be worth $88 million today. Bitcoin was worth 0.003 cents in 2010. But the future can’t be predicted, and the path to successful investing is not simple. For those not intimately familiar with cryptocurrency, bitcoin has been volatile, despite the fact that some have called it a safe haven.
Arjun Kharpal, a CNBC technology correspondent, argues in a recent opinion piece against those analysts who claim bitcoin is a safe haven asset for investors. Several analysts have recently claimed that one reason for bitcoin’s continued growth of late is that investors are seeking a safe haven asset for their money because the stock market has been less reliable.
Bobby Lee, CEO and co-founder of BTCC, for example, has said people turn to bitcoin today the way they used to turn to gold when seeking a safe haven for assets.
Kharpal said he has never believed bitcoin to be a safe haven. He said bitcoin’s performance over the past year compared to the Nasdaq, a technology index, and gold demonstrates that bitcoin is more similar to the Nasdaq. From mid June 2016 onward, the Nasdaq and bitcoin have steadily risen. Nasdaq recently broke the 6,000 point barrier and continues to rise. Bitcoin, for its part, seems to hit a record high daily.
Investing in both the index and bitcoin are both risky, Kharpal maintains.
In comparing bitcoin’s trading pattern to gold indicates bitcoin is not as safe of an asset. Gold found significant support from mid June 2016 to mid October. Bitcoin, in contrast, was not showing significant change at the time.
Also read: Bitcoin value: an unsafe haven
Once President Trump was elected, many investors moved from gold to riskier assets, thinking the new administration would increase spending and reform taxation, thereby boosting stocks. Gold continued to decline while bitcoin rose. Gold did find some support in the first few months of the new year, but bitcoin has continued to set new records repeatedly.
Investors clearly are flocking to bitcoin, not for stability, but for better returns, Kharpal claims. Bitcoin has spiked 150 percent year to date. Investors who still think bitcoin is a safe haven asset are mistaken, he summed up.
Featured image from Shutterstock.
Last modified: January 25, 2020 12:10 AM UTC