Correlation and bitcoin as a safe haven, the misunderstanding

No, bitcoin is not a safe haven because it goes up when there is global instability. It is because of its two unique properties. One being that it is uncorrelated with all other asset classes over time, and the other being that it is censorship resistant.

There is a great misunderstanding that has been floating around in the news lately. Bitcoin and gold have been moving in opposite directions, and the global markets have been crashing as fear around the Coronavirus, Covid-19, is growing. 

How do we define a safe haven asset?

As we have seen in the last week, people have been quick to publicly cancelling bitcoin’s position as a safe haven. While the year started with clear negative correlation between global instability and bitcoin, bitcoin has been falling with the stock markets lately. Meanwhile, the gold price is pushing to the highest levels since the beginning of 2013. For many people, fulfilling its role as a safe asset; holding when stock markets are tumbling and global turmoil is present.

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