The major news today isn't that the bitcoin price has risen by a couple of hundred dollars overnight, nor is it that any fresh company or nation has adopted bitcoin as acceptable tender. Instead, it's perception based.
Forbes just published this article titled:
"Bitcoin Is The New Gold"
Many reading will remember tens if not hundreds of articles over the last three or four years from the same outlet calling for the death of bitcoin, suggesting it's a temporary bubble and that all bubbles must pop. Keep in mind that most of these are written by the same author.
How the tables have turned.
The crux of the article in focus here is that bitcoin has become the new safe haven asset. This term refers to the asset that individuals flock to (in other words, buy) when there is a degree of uncertainty, or risk, surrounding things like the global economy, global politics or geopolitical stability.
For the past thousand years or more, gold has been the safe haven asset. As Forbes author Panos Mourdoukoutas now points out, there is a large degree of geopolitical uncertainty hanging over global economies right now. North Korea is firing missiles here there and everywhere. The state of US politics is in a practically never before seen mess. The European monetary system is unstable and its economic bloc has taken a huge hit with the UK set to leave and go it alone. Central banks across the globe don't know what to do with interest rates or whether anything they do decide to do is actually going to have any effect.
These are uncertain times and it's not gold that's rising in price – it's bitcoin.
Sure, some of the recent price rise in bitcoin is likely due to speculative acquisition on the back of the run that we have seen over the last few months; that's reasonable and to be expected. For years now, however, the cryptocurrency community has been pitching its poster boy as a potential risk off asset and – finally – it looks as though this pitch has been validated.
Author : Jack Dean Jack has worked in the cryptocurrency industry for 5 years now as a reporter. His experience is predominately in banking, while he also has a keen interest in the forex world. His daily output is read by thousands of readers globally.