Leading cryptocurrency Bitcoin's price fell 8% on Sunday, after which the decline continued to pull the price to the $ 8,000 mark. Similarly, according to CNBC's report, Dow Jones Industrial Average (DJIA) futures dropped over 1,000 points.
Serious declines in both assets may indicate that the atmosphere of fear prevails in the markets. However, the ounce price of “safe harbor” gold has reached up to $ 1,700, which is an unprecedented price since December 2012.
Isn't Bitcoin Safe Harbor?
In fact, perhaps, it is necessary to evaluate the status of Bitcoin as a “safe haven” slightly different than gold. Because, although gold is considered as a safe haven due to its limited supply, it is generally under the control of governments and central banks and in this case, if you do not store gold as “under the pillow”, you still trust banks and governments.
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However, the fact that Bitcoin is a safe haven depends on both its limited supply and not being under state or bank control. However, we often see price fluctuations as the cryptocurrency market is still a new market. This causes traditional investors to worry.
So, in a sort of crisis, governments can't touch your Bitcoins while they can seize your gold in banks. From this point of view, my humble view is that the real “safe harbor” asset is Bitcoin…
Why Bitcoin Falls?
The correction movements following the large increases in the crypto money market are considered normal. While these correction movements are sometimes as small as 2%, 3%, sometimes they can increase to 10% to 15% due to various sales pressures. This is a very normal movement. It is even considered as a healthy situation for the market.
From this point of view, it would not be correct to say that Bitcoin is not a safe haven only because of the price drops. I think it is good to wait for them to prove themselves, as before, by giving time to Bitcoin and other cryptocurrencies.
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