In these days of coronavirus, there is a big mess on financial markets, commodities and precious metals. Great volatility is growing also on bitcoin and other cryprocurrencies. But many people are wondering if bitcoin is still and investment or it is a durable asset, a scarce and precious active or a safe heaven.
Some investors are seeing bitcoin as an assurance and not an investment. Do not forget that the US Federal Reserve is taking unprecedented measures to bail out banks and businesses while shoring up more credit. These measures will impact on purchasing power of money in the next years and will lead to massive change in inflation.
The Federal Reserve said Monday it will launch a barrage of programs aimed at helping markets function more efficiently amid the coronavirus crisis. Among the initiatives is a commitment to continue its asset purchasing program “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
So why bitcoin can be considered as an assurance? The financial analyst Peter Brandt is focusing on this on the below tweet.
Brandt has also made aware that gold is finally back to inflation-adjusted levels from about 40 years ago. Gold is still at its highs even during this uncertainty times, making manifest that is still a great safe heaven against the fiat currencies.
Unlike gold and bitcoin, fiat currencies now have zero or negative earning power, while central banks are rushing to cut rates to keep people borrowing and spending. The investment and insurance policies against this quantitative easing and this monetary madness include assets such as gold and Bitcoin which, as we know, are regaining ground on fiat currencies as early as this week.