Investing.com – As Bitcoin grows in popularity, more and more investors are turning to the digital currency as a safe haven.
This practice is especially popular in countries with high inflation and economic woes, such as Venezuela or Brazil.
But can Bitcoin really be treated as a safe haven? Clement Thibault, Senior Analyst at Investing.com, thinks not.
“I understand the rush to cryptocurrencies in countries where the fiat currency is unreliable, but the unstable nature of Bitcoin prevents it from acting as a true safe haven”, he said.
Indeed a safe haven is often a known, stable commodity, and this stability is its core feature of gold.
In countries with harsh economic conditions, this volatility might not be a factor in the decision to turn to Bitcoin. The fact that the home country cannot affect the price of the digital currency might be enough.
However, even they should remember that Bitcoin’s price could be subject to manipulation. In August, a Hackernoon article denounced “Spoofy”, apparently a group of traders, as manipulating the currency.
Regulatory matters still remain unresolved at this point, as countries debate how to deal with the new digital currency.
As a safe haven, Bitcoin is currently a last resort, servicing only those with nothing to lose. Digital currencies are still not suitable for those who are just looking to preserve capital in times of crisis.