The narrative surrounding Bitcoin often began as a peer-to-peer digital cash form, turning into a store of value and eventually a safe haven like gold.
The concept that Bitcoin will behave similarly one day is becoming increasingly valid after more than a year of correlation, as well as the original safe haven presence. And with a potential economic collapse currently underway, this theory will be put to the final test.
Crypto Currency's Relation to Gold One Year Look Back
After Bitcoin's extremely widespread meteoric rise in the mainstream, the first cryptocurrency has spent the entire 2018 crashing in a downtrend and bear market, and the price of the asset from $ 20,000 to $ 3,000; dropped up to.
However, in early 2019, the asset began to show that a base was built and the asset was accumulated. At the same time, a similar pattern was shaped in the form of gold.
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All this happened with the tension between the USA and China and the seriousness of the trade war taking place.
As the year progressed, Bitcoin continued to follow the growth of gold, followed precious metal, and reinforced the safe haven expression.
And in the last weeks coronavirus outbreak began to spread and fear of economic collapse began to come true, gold began to go into space slightly Bitcoin holds value during the last selloff, correlation continues.
– Income Sharks (@IncomeSharks) March 26, 2020
Continuous Correlation Confirms Bitcoin Safe Harbor Narrative
The correlation that has been going on for more than a year as the economy approaches the collapse confirms the idea that Bitcoin can operate as a safe haven asset such as gold.
Gold behaves like this, due to the limited supply of the asset. The supply of Bitcoin is even more limited and is digitally limited to only 21 million BTC compared to only the gold source waiting for mining.
Bitcoin can ultimately show a stronger performance on scarcity, but compared to the gold used in trade and commerce for centuries, given how new the asset is to the financial world, it is still hidden in mystery and often demonized.
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While gold is used for ornate jewelery, although it is a status symbol of wealth and success, Bitcoin is still used in dark web transactions as part of malware infections and other illegal crimes.
Since Bitcoin still has a lot of stigma to shed, it can take years to finally accept the safe haven narrative. For now, however, the crypto asset remains associated with gold, and it adds more validity to the theory day by day.