• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news
Crypto.com Logo
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
No Result
View All Result
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
No Result
View All Result
NewsBTC
No Result
View All Result
Nexo Logo

Multi-Billion Dollar Crypto Firm: Bitcoin Finding Use as Hedge for Global Crisis

Nick Chong by Nick Chong
3 years ago
in Bitcoin
Reading Time: 3 mins read
Advertisement

Throughout its short history, Bitcoin (BTC) has been seen as anything but centralized, sovereign, and censorable. The crypto asset was created by a pseudonymous individual, is secured by a global group of miners, and is backed by no government, traditional finance system, or common entity.

And as a result, many have looked to Bitcoin and its brethren — other digital assets — as a much-needed escape hatch from fiat and government overreach. Indeed, BTC was released in the wake (and seemingly as a result) of the 2008 Great Depression, and many that have since flocked to the cryptocurrency are staunch anti-establishment proponents.

Related Reading: Bitcoin (BTC) Soars Past $9,300 in Massive Weekend Pump: Bulls on Parade

Some, however, have denied this key narrative. Cynics of the theory remark that BTC is too nascent to be used as a proper store of value, citing the periods of volatility, especially the downturns, as a perfect case in point. Regardless, a massive cryptocurrency firm recently laid out why these naysayers may be wrong in their postulation.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Bitcoin as a Macroeconomic Hedge

Grayscale’s industry-famous research department recently released a report titled “Hedging Global Liquidity Risk with Bitcoin”. In it, the firm explained how the leading cryptocurrency is becoming used as a hedge in financial crises and periods of geopolitical turmoil.

More specifically, the crypto investment firm looked into how the asset can be used during bouts in which there is high “liquidity risk”, the “risk of a real decline in wealth resulting from an imbalance in the amount of money and credit relative to debt in a given economy.”

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

To back this point, Grayscale looks to three primary facets of Bitcoin’s existence: store of value, spending viability, and growth possibility.

Firstly, as the company has characteristics, BTC can act (and has acted) better as a store of value than gold. Unlike the metal, the crypto is mathematically scarce, capped at 21 million units; BTC is decentralized and verifiable through the Internet; BTC is portable and divisible through digital technologies, and is unconfiscatable.

Gold, on the other hand, has an unlimited supply, centralization risks, an inability to be easily divided and moved around, and concerns around its purity. The chart below from Grayscale sums this argument up fairly well.

crypto bitcoin

Secondly, Grayscale purports that due to having similar properties to physical cash, Bitcoin will retain a solid value proposition amid a liquidity crisis. They look to recent adoption by Whole Foods, AT&T, Overstock.com, Microsoft, Expedia, PayPal, and Dell to corroborate their claim.

Thirdly, they remark that the potential that blockchain technologies have to grow and create value will only stimulate demand further, which should mitigate most, if not all negative effects of any downturn in global markets.

So, are these characteristics helping Bitcoin hold true in the current geopolitical stage? Well, yes, and it already has been for a while.

Grayscale looks to the fact that during Grexit (Greece’s debt-fueled financial crisis in 2015), China’s market collapse in 2015 and 2016, Brexit, a short period of growth worries for the U.S., and the recent trade war debacle, Bitcoin has done rather well for itself.

In fact, some have argued that the recent political tussle between China and the U.S. is what has contributed greatly to the recent rally in the Bitcoin price, with some arguing that Chinese traders and others in Asia have fled to Bitcoin from traditional stocks to deter most downside risk. They write:

“While it is still very early in Bitcoin’s life cycle as an investable asset, we have identified evidence supporting the notion that it can serve as a hedge in a global liquidity crisis, particularly those that result in subsequent currency devaluations.”

Indeed, this strength is why many love Bitcoin. In fact, Delphi Digital, a New York-based crypto research group, recently pointed out that BTC is absolutely lapping every other asset class, even the more risky, high-return blue chips and the venture-backed Silicon Valley darlings that have begun to trade on public markets.

At the time of their analysis (end of May), Bitcoin was up over 120% year to date, while crude oil and the Nasdaq 100 index were up a mere 18% and 13%, respectively. It’s an even scarier sight for tried and true assets, like gold, foreign currencies, and government bonds, which are up less than 5% so far. This led the firm to the conclusion that BTC could be the  “King of the Asset Class Hill”.

Featured Image from Shutterstock
Tags: bitcoincryptomarketprice
Tweet123Share196ShareSend
Win up to $1,000,000 in One Spin at CryptoSlots
Nick Chong

Nick Chong

I am a writer who has been following Bitcoin for years now. My insights and interviews have been featured in leading publications in the industry such as LongHash and Decrypt. I own a small amount of Bitcoin.

Related Posts

bitcoin

Why Bitcoin Could Return To $28,000, But By The End Of 2022

4 hours ago
$15k Possible Bottom For Bitcoin? “Delta Cap” Says So

$15k Possible Bottom For Bitcoin? “Delta Cap” Says So

7 hours ago
bitcoin bear

New Bitcoin Record Paints Incredibly Bearish Picture As BTC Struggles At $19,000

9 hours ago
Bitcoin

Why Bitcoin Could Collapse Another 50%, Says Michael “Big Short” Burry

10 hours ago
Crypto Market Loses $60 Billion As Bitcoin Dips Below $20,000

Crypto Market Loses $60 Billion As Bitcoin Dips Below $20,000

10 hours ago
Bitcoin

Bitcoin Sees Worst Quarter In 11 Years

11 hours ago

Premium Partners

Top Brokers

PrimeXBT

PrimeXBT

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
7BitCasino

7BitCasino

Review · Visit
BC.Game

BC.Game

Review · Visit
Punt Casino

Punt Casino

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bspin

Bspin

Review · Visit

Sportsbooks

1xBit

1xBit

Review · Visit
BC.Game

BC.Game

Review · Visit

Crypto To Add The Best Gains To Your Portfolio For Bull Market: Gnox (GNOX), Cronos (CRO) And NEAR Protocol (NEAR)

July 1, 2022

U Promise Me: The Digital Promise Platform

July 1, 2022

XT.com Lists Land of Fantasy (LOF) With USDT Trading Pair

July 1, 2022

LYOTRADE Launches Crypto Loans—Get USDT and Win Against Volatility

July 1, 2022

Torches Genesis NFT Launching, Win Torchlight NFT to Unlock IDO Allocation

June 30, 2022

ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Crypto Prices from Nomics

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2021 NewsBTC. All Rights Reserved.

  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play Games
  • Bet & Win

© 2021 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.