Rajarshi Mitra
Independent Analyst
- Bitcoin's potential as a store-of-value, spending characteristics and growth as an asset makes it a reliable hedge.
- Grayscale noted that BTC's price is defying expectations and going up in the middle of the U.S.-China trade war.
Grayscale Investments published a case study to show how Bitcoin could be used as a hedge against financial instability. The digital assets investment firm that offers Bitcoin (BTC) trust shares used the US-China trade war to make their point. As per the firm - Bitcoin's potential as a store-of-value, spending characteristics and growth as an asset ensures that it will perform strongly during both regular economic cycles and liquidity crises.
Grayscale advises in its report:
"With continued adoption, Bitcoin represents a transparent, immutable, and global form of liquidity that can provide both wealth preservation and growth opportunities. As a result, we believe it deserves a steady strategic position within many long-term investment portfolios."
Grayscale noted that BTC's price is defying expectations and going up in the middle of the U.S.-China trade war:
"While the risk asset drawdown is still in its very early stages, Bitcoin is on the rise as these risks are just beginning to show up in other asset and currency prices. Since Trump first announced the tariff hike in May, Bitcoin has generated a cumulative return of 104.8% through August 7, versus an average of -0.5% for the twenty other asset classes, markets, and currencies below during the same period."
BMO's chief investment strategist, Brian Belski, doesn't share Grayscale's optimism. Belski feels that it is too early to call BTC a safe haven:
"Bitcoin has been excessively volatile, especially the last couple of years. It's the sexy kind of thing to go to now. I don't base my investments on sex appeal. I base my investment on longer-term perspective. And I think the longer-term perspective, in terms of Bitcoin being that safe haven, I think it's way too soon to call that."
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