6 days ago
The thought of "safe haven" assets—traditionally marked by golden and authorities bonds—amid marketplace turmoil, is being tested similar ne'er before.
For decades, portfolio operation and hazard absorption were simple: 60% equities, 40% bonds and erstwhile markets panicked, superior typically flowed into golden and authorities bonds. These assets were slow, steady, and predictable, making them an perfect harmless haven for investors looking for extortion against volatility. But successful today’s satellite of 24/7 markets, geopolitical instability, and rising distrust successful sovereign systems, person turned that logic connected its head, asking the question: does the explanation of a harmless haven request a refresh?
Enter the caller kid successful the block: bitcoin.
It is highly volatile, wide misunderstood, and often dismissed arsenic a speculative plus by galore corners of Wall Street and Main Street. Yet, it has staged an bonzer tally since the COVID-19 marketplace lows.
It’s up implicit 1,000% since the COVID-19 marketplace clang successful March 2020. During that aforesaid period, long-duration bonds—measured via iShares 20+ Year Treasury Bond ETF (TLT)—are down 50% from their 2020 highs. Even gold, the existent and tried harmless haven asset—up 90% implicit 5 years—looks little awesome erstwhile adjusted for monetary debasement, which saw, successful 2020 alone, implicit 40% of the full USD wealth proviso being printed.
Still, bitcoin’s harmless haven credential remains contested by investors.
In respective caller risk-off events, it acted little similar a hedge and much similar a high-beta hazard plus against the Invesco QQQ Trust, Series 1 ETF.
Covid-19 (March 2020): BTC fell 40% vs QQQ’s 27%
Bank situation (March 2023): BTC -14%, QQQ -7%
Yen transportation commercialized unwind (Aug 2024): BTC -20%, QQQ -6%
Tariff-led selloff (April 2025): BTC -11%, QQQ -16%
The archetypal 3 examples amusement bitcoin arsenic a benignant of leveraged tech trade. But the astir caller tariff daze broke the signifier — bitcoin dropped little than the Nasdaq, showing comparative spot successful an different anemic macro situation spurred by President Trump’s tariffs.
While these information points whitethorn not marque a trend, this evolving behaviour highlights a broader phenomenon: the planetary fiscal backdrop has changed.
“Non-sovereign stores of value, similar bitcoin, should bash well," said NYDIG Research successful a note. "Politically neutral assets should beryllium exempt from the planetary machinations astatine play close now.”
Bitcoin is volatile, yes, but it is besides globally liquid, decentralized, censorship-resistant, and immune to tariffs oregon cardinal slope policy. In an epoch of geopolitical hostility and fiscal repression, those attributes commencement to marque the plus look much enduring than different harmless havens.
Meanwhile, accepted harmless havens aren’t looking truthful safe. Gold’s gains look little awesome erstwhile weighed against the standard of monetary expansion. Long-duration bonds aren't faring overmuch amended either arsenic the 30-year treasury output approaches 5%, making them achy for duration-heavy portfolios.
Since the sell-off began past Thursday, the Nasdaq has dropped astir 10%, bitcoin is down 6%, TLT has fallen implicit 4%, and golden has slipped much than 3%. Meanwhile, the DXY scale — which tracks the U.S. dollar against a handbasket of overseas currencies — remains comparatively flat, portion the all-important U.S. 10-year Treasury output has surged astir 8%.
On a risk-adjusted basis, bitcoin is holding its ground—performing nary worse than accepted safe-haven assets similar golden oregon TLT.
Looking astatine these 4 large situation events, a signifier emerges: : each sell-off successful bitcoin has marked a important semipermanent bottom. During the COVID crash, BTC dropped to ~$4,000 — a level ne'er seen again. In the March 2023 banking crisis, it concisely fell beneath $20,000 earlier resuming its climb. The August 2024 yen transportation commercialized unwind brought it down to $49,000 — again, a level that hasn’t returned. If past is immoderate guide, wherever this existent debased takes us, it whitethorn good found the adjacent semipermanent floor.
So, is Bitcoin a harmless haven?
If the aged framing — debased volatility and downside extortion during a panic — inactive holds, past BTC falls short.
But successful a fiscal satellite dominated by sovereign risk, inflation, and changeless argumentation uncertainty, bitcoin starts to look much similar an plus that investors mightiness request to see for durability, neutrality and liquidity.
In this evolving landscape, possibly bitcoin isn’t failing the harmless haven test. Maybe the aged playbook of what harmless haven is, needs to change.
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