Has the Coronavirus Put an End To the Bitcoin Safe Haven Narrative?

Bitcoin price had been soaring over the last two months, reaching over 60% ROI year to date. But recent fears over the coronavirus has caused markets to tank, including the stock market and the crypto industry.

Meanwhile, gold, the safe-haven asset investors flee to during times of economic distress has been skyrocketing. Does the divergence between gold and its digital counterpart following the coronavirus scare that put an end to the Bitcoin as a safe haven narrative?

Coronavirus Concerns Cause Major Financial Market Scare

The coronavirus is spreading rapidly, and even the CDC is warning that the virus reaching the pandemic level may be inevitable.

But possibly worse than the pandemic and virus itself, is the impact it is having on the global economy.

Related Reading | Coronavirus Fear Shakes Up Markets, But Crypto Remains Unaffected 

Global stock markets have been tanking, closing out some of the largest losses in over a year.

Transportation is affected, and production facilities around the world – notably in the manufacturing epic-center of China – have been shut down.

Worst of all, fear, uncertainty, and doubt are causing the global community at large to absolutely panic over the potential implications of the pending pandemic.

That fear has spilled into cryptocurrencies an asset class where its investors were just days ago talking about new all-time highs and picking out the color of which Lamborghini or Tesla they were interested in buying.

But once the stock markets began to plummet, crypto investors took a moment for pause, wondering if their high-risk, speculative asset could fall just like stocks backed by tangible fundamentals did.

And fall it did. Bitcoin dropped from highs of around $10,500 to as low as under $9,000 as of the time of this writing. With fears over the coronavirus and how it could further decimate the global economy, the crypto market selloff may continue.

Meanwhile, gold, a flight of safety for investors throughout the ages, has been rising in value as investors fear a recession ahead.

Has the Pandemic Put an End to Bitcoin as a Safe Haven Asset?

Bitcoin, the digital counterpart to gold, spent the better portion of 2019 rising alongside the precious metal, fueling a “Bitcoin as a safe-haven narrative” that is still widely discussed today.

But with gold reaching new highs, but Bitcoin and other crypto-assets falling like traditional stocks, that safe haven narrative may need to be put to rest.

While it’s true that Bitcoin shares many similarities as gold, including relative scarcity, the first-ever cryptocurrency is still relatively young and lacks adoption or a use case.

Gold, meanwhile, has been traded, used, and held for millennia. 

Related Reading | Okay Boomer: Millennials Prefer Bitcoin To Gold During Crisis 

And while millennial investors may see the benefits of Bitcoin, it’s the baby boomers that command much of the world’s current wealth that makes up the flight of capital from stocks to gold.

With a real economic catastrophe finally here, will Bitcoin‘s true value come to light? Or has the safe-haven narrative been tarnished by the coronavirus for good?

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Source: Newsbtc

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