Bitcoin Has Become a Safe Haven Asset?

By johnwege | johnwege | 7 Mar 2022

That title alone, probably gave you some type of reaction, either nodding in agreement or shaking your head in disagreement.  And who could blame you?  That is a bold statement to make, especially because bitcoin has fallen from its all-time high price of $69k to around $38k at the time of writing.  How could something be considered a haven asset when its value has nearly dropped in half since November of last year?  But I am here to tell you that it is, and some big people in the finance world are also beginning to say it.

Today Chamath Palihapitiya did just that on Twitter.  But to know why this is a big deal, you first need to know who Chamath is.  He is positioning himself up to be, is considered by many to be the Warren Buffet of the next generation.  He was one of the first key executives in Facebook that was responsible for transforming it into the giant that it is today.  Along with that, he is the owner of the Golden State Warriors NBA team, an early investor in SoFi, Virgin Galactic and the list goes on and on.  He also has his fund that has invested in some of the biggest up-and-coming projects.  Not to mention, he also got in very early with Bitcoin and Solana.  In fact, during the early days, it was rumored he owned 10% of the circulating supply of BTC. He is one of the biggest names in the tech, investing, and finance world.  To put it simply, when he speaks, people listen.  Which makes what he said today even more interesting.


He only wrote two tweets, but there is a lot of powerful information to digest within those tweets. Most people while considering the world situation that is taking place, will say this is the time when the US dollar is finally on its last legs.  The time when it gives way to something else, something better.  After all, one of the most famous phrases amongst bicoiners is; "fix the money, and you'll fix the world."  At first, it comes off as a very simple statement, and potentially silly.  How could fixing the money actually fix a lot of the world's problems? But, once you have gone fully down the bitcoin rabbit hole, learning what money is, how it punishes normal people and benefits the rich, and to a certain extent makes us all slaves to our jobs, making it impossible to ever get ahead. There is a whole lot more to it than that, and will probably write an article on this in the future. But what Chamath is saying above goes against the usual train of thought in the bitcoin world. That train of thought was that for bitcoin to rich its fullest potential, the US dollar would have to die and go away.  Chamath is saying that isn't the case.

He isn't the only one saying this.  Bitcoin bull/maximalist, Michael Saylor, has been saying nearly the same thing since he has gotten into the bitcoin space.  Many have accused him of possibly attacking the US dollar. But he has always stated that he sees both the US dollar and bitcoin coexisting together.  Bitcoin's rise in popularity can be very beneficial to the US dollar. 

So let's move on to the second statement in his tweets.  How could the US dollar and bitcoin both be winning? After all, the US dollar is experiencing unprecedented inflation. And, bitcoin has dropped by nearly 50% since November of 2021.  The reason for that is simple.  They are pretty much the best-performing major assets in their categories.  Yes, both are dropping in value with inflation and also bitcoin's recent price dips.  But, they are holding up much better than the other assets in their category.  Let's look at the US dollar compared to the Japanese Yen, which is an easy example because I currently am residing in Japan.  Japan is experiencing less inflation than the US, but at the same time, the Yen is still down drastically during the last 6 months compared to the dollar. During the summer of last year, the conversion exchange was around 104 Yen to 1 US dollar. Now fast forward to today, and now it is around 115 Yen to 1 US dollar.  You'll find that it is the same all across the board with fiat money.  People are fleeing towards safety with the US dollar.


The same is happening with bitcoin.  Yes, bitcoin is down roughly 45% percent from its all-time highs just a few months ago.  But the scary thing is that many other cryptocurrencies are down 80%, and others are down more than 90%. It is also the quickest to recover. While bitcoin marched up to new all-time highs during November, some coins were still drastically below their previous marks.  And now that they have fallen further, we can only imagine that the time required for them to recover will take even longer now, if ever.  There are no guarantees in the world of cryptocurrency. Always remember this key thing. It isn't how much money you make, but how much you can hold onto and keep.  Yes, altcoins have potential higher gains.  They come and they go.  But you don't want to be around when that eventual rug is swept from out beneath it. 

So is bitcoin a haven asset? I would say that if it isn't already there, it is getting very close and will be soon.  The asset that people will run towards for safety.  I say this over and over like a broken record. But, with everything that has been happening in the world, especially recently.  The world is finally waking up to bitcoin.  Once they finally fully understand it, its true value, and the fact that there will only be 21 million bitcoin.  With millions of them already being lost forever.  That is the moment when things will get truly interesting.  If you thought bitcoin was volatile now, wait until that moment comes.  It is at that moment that many, many people will have deep regrets for getting distracted with altcoins and forgetting the real mission.  To those that planned accordingly, you will be treated like a genius amongst your friends, relatives, and colleagues.  But by then, you won't need to have that job anymore.

How about you? Do you think that bitcoin has become a haven asset? Why or why not?



As always, thank you for reading!

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