It is quite clear that the global economy is currently in the doldrums due to a wide range of factors, and investors all over the world are currently at crossroads with regards to finding the best ways to protect their capital. When such a thing happens, then investors look for assets that could either protect their capital or act as a hedge against an economic recession. Plenty of analysts have stated that a global recession could be looming and the trade war between the United States and China, the world’s two biggest economies, is not helping matter in this regard. So how does Bitcoin fit into all this?
Bitcoin as Hedging?
It is now being considered that Bitcoin could well be the hedge investors are looking for as the global economy slowly but surely heads towards a downturn. That being said, it is important to note that after the incredible rally that Bitcoin enjoyed during the first six months of the year, it has faced difficulties with maintaining the same momentum. The token struggled in July to maintain stability, and this has continued into August.
Even with the recent volatility, however, there are plenty of people who feel that this is only a phase for Bitcoin and the cryptocurrency will be able to regain its momentum in the near future.
Experts now believe that Bitcoin could be a digital safe haven for investors, much like how gold has proven to be this year so far. Due to the potential loss of capital, Bitcoin could work as a protection against the downturn, if it ever arrives. Last but not least, it is also important to add if such a thing happens, then a lot of money is going to flow into Bitcoin, and the price of the token is almost certain to rise in the months to come. Maybe the ongoing global economic trouble could prove to be a blessing for Bitcoin.
What do you think?
Featured image: DepositPhotos © aa-w