But Bitcoin IS Safety!
Is it though?
Evidence is starting to suggest that Bitcoin isn’t the safe haven asset that maximalists have long claimed — especially when looking toward the latter end of the charts and seeing a near direct correlation. Of course, this will be met with the typical cries of, “ZOOM OUT BRO.” Okay, ignore the year chart and let’s move on.
2019: Bitcoin Is The Answer
Throughout 2019 maximalists and goldbugs alike used example after example of failing nation states that were in desperate need of the ““only reliable solution””: deflationary currency. For coiners, this meant Bitcoin (or a derivative thereof), which has a cap on supply, for goldbugs, this meant literally bars of gold and gold coins. Either way, as both types of Austrian economists displayed their disdain for dirty fiat and the mass adoption of “hard money” in places like Venezuela, Chile, Hong Kong, and the Middle East, they lacked one simple concept: any proof whatsoever.
Maximalists and goldbugs were quick to trumpet how necessary “hard money” was in these situations, but the truth is far from that.
Meanwhile, as 2019 came to a close and China informed the world we were in for a serious shitshow, it became hard to imagine that any Hong Kongers who sold their $HKD for Bitcoin wouldn’t have to switch back so they could purchase masks, food, and other necessities, while protesting took a backseat to COVID-19.
Same goes for those in France, the Middle East, and other areas of general social unrest.
2020: The Bat Virus Outwits The Other Virus
As much as coiners want to believe that tHe HaLviNg and a supply cap provide reason enough to move assets into Bitcoin, anecdotally, approximately zero of the people I know sold stocks, bonds, and other assets to buy cryptocurrency. But many sold assets and sidelined some cash. Additionally, even those who introduced me to cryptocurrency sold out long ago and never bought back in — nor do they display any desire to.
There’s an excellent reason for this: when you don’t know where your next paycheck will come from (likely a government handout), don’t know how long it will take to get groceries, and don’t know what kind of living restrictions will be put in place, you’re not apt to go out and trade your easily spendable dollars for an asset accepted… where? Coinbase? Okay.
Secondly, those flushed with wealth aren’t going to sell assets and move the generated income directly into a more volatile asset. Sidelining cash is the best method for being ready for an economic downturn.
A Welcome Reprieve
For the first time in… maybe ever? I feel little need to remind people why cryptocurrencies and hoarding assets like gold are generally ridiculous ideas. No one needs the reminder, because it’s clear. You need food, water, shelter, and a few other essentials. The most efficient way to purchase these goods — be they bread, a home, or toilet paper — tends to be good ole fiat currency.
No need to pretend otherwise. Not now, when the truth is so obvious.