10 papers analyzed
Some studies suggest Bitcoin can act as a safe haven during economic and political uncertainties, while other studies indicate it is less stable and less reliable compared to traditional safe havens like gold.
10 papers analyzed
The concept of a "safe haven" asset is crucial for investors seeking to protect their portfolios during periods of market stress and economic uncertainty. Traditionally, assets like gold have been considered safe havens due to their stability and low correlation with other assets during crises. Recently, Bitcoin has been proposed as a potential safe haven asset. This synthesis examines whether Bitcoin can be considered a safe haven asset based on various research findings.
Volatility and Liquidity Concerns:
Weak Safe Haven Properties:
Time-Varying Safe Haven Role:
Comparative Analysis with Gold:
Hedging and Diversification:
The research indicates that while Bitcoin exhibits some characteristics of a safe haven asset, particularly during periods of economic and political uncertainty, it is generally considered a weak safe haven compared to traditional assets like gold. Its high volatility, lower liquidity, and transaction costs are significant barriers. However, Bitcoin's role as a hedge and diversifier in various markets suggests it has potential, but it is not yet a reliable safe haven asset. Investors and portfolio managers should remain cautious and consider Bitcoin's evolving nature in their risk management strategies.
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