Bitcoin promoted from being ‘digital gold’ to ‘haven asset’ as it continues to rally

Bitcoin has been observing a pattern of sudden surges and falls over the past few days, even as the coin hovers between $10k and $14k. Bitcoin’s value shot up 42% since June and the price of the coin reached $12k, at press time. The community witnessed this surge after almost a year-long bear market, where the price stumbled in the $3k range.

Bitcoin managed to re-trace its journey from $3k to $14k and is expected to go higher, similar to the last bull-run’s ATH at $20k. But, the volatility of the market cannot be ignored as the coin after surging by almost 28% within two days, the coin fell by 12% within two hours.

However, according to the Financial Times, the current rally of Bitcoin indicates greater participation from the public, thus, delivering higher prices, a characteristic associated with ‘haven asset’. An investment that is expected to remain stable during times of turbulence is referred to as haven asset, and according to the publication Bitcoin’s surge coincided with soaring prices of ‘classic haven assets’ like the Japanese yen, the Swiss franc, and gold. It noted that:

“For the true believers, that is a sign that bitcoin has earned a place among the assets that gain during flights to safety.”

From being termed as digital gold, Bitcoin’s performance has led many investors to gain tremendous profit despite the bears in the market. Naimish Sanghvi of Coin Crunch said by investing a meager amount of Rs 5,000 every month since October 2018, his portfolio stands at a 100% profit. He added:

“If you started in January 2018 (After ATH), you’d still be in 64% profit. “

The CEO of London-based LMAX Exchange, David Mercer told the publication:

“Bitcoin is digital gold — it’s a genuine alternative to traditional safe havens.”

While the major part of the world is still learning about cryptocurrency, Bitcoin’s current performance has led for it to be considered as a ‘haven asset’, however, the volatility in the price of Bitcoin could pose as a problem.