For centuries, the precious metal Gold has been the go-to safe haven asset in times of war and turmoil. The physicality, the demand and the limited supply meant there was always value in gold. It rarely mattered if there was a stock market crash, a war or economic despair, governments and individuals always benefited by the storing and usage of gold.
However, as 2020 gets underway, there is a clear alternative to gold, a new challenger to the go-to safe haven status of the yellow metal. Although been around for nearly a decade, it is only in the last few years that the importance of cryptocurrency, and bitcoin (btc) in particular, as a safe haven asset has become impossible to ignore.
The recent spike in Bitcoin (btc) which saw the granddaddy of crypto hit nearly $10k coincided with heightened tensions between the US and Iran. The prospect of the world’s largest consumer of oil in a war with a nation that controls the Straits of Hormuz which sees 66% of the world’s entire oil global supply transported through it, saw investors flocking to safe haven assets. Gold went up, but not as much as the price of Bitcoin.
And it isn’t just the US and Iran tensions which have seen investors move towards crypto. In South America, the failing economy of Venezuela, has turned to crypto to beat sanctions and hyperinflation. Uruguay has its own love affair with crypto, whilst Argentinians are also turning to digital currencies to beat inflation and its own failing fiat currencies.
A big boost has been the ease in which to buy bitcoin and other cryptos as well as the low cost of mining. Exchange platforms such as Coinipop allow the quick, easy and low cost buying and selling of cryptocurrencies. The increased accessibility has opened crypto to everyone and in a world where there are wars, political turmoil and natural disasters, turning towards the readily available crypto world is fast encroaching and even replacing the safe haven status of Gold. There will always be a need and a demand for gold, but the world cannot ignore the growing usage of crypto.