Bitcoin as a Safe Haven: Is It Even Worth Considering?
21 Pages Posted: 22 Jul 2018 Last revised: 27 Oct 2020
Date Written: June 28, 2018
Research in cryptofinance has continued to consider whether Bitcoin possesses a safe haven property as traditionally defined by its correlation with other assets during times of market stress. However, this neglects other attributes of assets that are important to investors during periods of crisis. Bitcoin is more volatile, less liquid, and costlier to transact (in terms of time and fees) than other assets (including the traditional safe haven of gold) even in normal market conditions. Until the market matures, it is therefore unlikely to be worth considering Bitcoin as a safe haven.
Keywords: Bitcoin, Safe Haven, Gold, Cryptofinance, Cryptocurrency
JEL Classification: G00, G01, G1, G11
Suggested Citation: Suggested Citation