Bitcoin strengthens as a safe haven for investors

The status of bitcoin as an asset-refuge during a period of economic turmoil is beginning to strengthen.

Previousyear the royal coin finished at 92% annualmaximum, this year also began very positively. However, most of this growth is caused not so much by internal improvements in the concept of bitcoin, but by how the market evaluated the asset.

There has been some shift. It is driven by the basics of cryptography, but many beginners are taken by surprise. Finally, bitcoin has confirmed its status as an asset-seeker.

In 2019, Bitcoin increased its credibility due toevents in Venezuela and Hong Kong, when the economic policies of both countries crashed. In less than a month, by 2020, bitcoin has grown by more than a quarter of its value.

One of the staunch supporters of the perception of Bitcoin as a safe haven is Fundstrat Research Director Thomas Lee:

"Bitcoin is the best-performing asset in the YTD class with gains of 26%... Safe Harbor Demand DrivesBitcoin, it may even surpass gold.

Gold is up 3% relative to Bitcoin's 26% jump."

Bitcoin is best performing asset class YTD 26%… demand for «safe haven» is boosting Bitcoin and arguably, #Bitcoin is seen as a better «safe haven» than $Gold #gold

— Gold is up a decent 3% vs a whopping 26% for Bitcoin pic.twitter.com/GWKEfYGcut

- Thomas Lee (@fundstrat) January 28, 2020

In the final months of 2019, the correlationBitcoin and gold culminated in three years. After the assassination of Iranian commander Kasam Soleimani by a U.S. drone, bitcoin and gold rose significantly. They got a further boost after Tehran’s retaliatory strike, during which an American base in Iraq was attacked.

When tensions between the US andIran declined, both assets showed a price correction. Since then, gold has stabilized, and Bitcoin has continued to respond with an upward movement to other events, including the outbreak of coronavirus in Wuhan, China.

While the correlation between these events is not obvious, it is impossible not to recognize that during this time, the S&P 500 fell by more than 2.8% and bitcoin rose by 3.6%.

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