In the past, whenever there has been a degree of uncertainty in terms of the global economy, global politics, or geo-political stability, investors tend to flock to what’s known as safe haven assets.
For the last thousand years or more, the term safe haven asset has invariably referred to precious metals and, more often than not, gold. This type of investment has always been viewed as a safe one, which can be attributed mostly to it being a finite resource.
Panos Mourdoukoutas, a noted Forbes author, points out that safe haven assets are becoming popular again due to the geopolitical uncertainties hanging over global economies right now. North Korea is firing missiles here there and everywhere. The state of US politics is in a practically never before seen mess. The European monetary system is unstable and its economic bloc has taken a huge hit with the UK set to leave and go it alone. Central banks across the globe don’t know what to do with interest rates or whether anything they do decide to do is actually going to have any effect.
The only difference now is that in these uncertain times it’s not the price of gold that’s rising — it’s Bitcoin.
Goldman Sachs analyst, Zach Pandl, wrote that the rapid increase in demand for bitcoin has been triggered by the growing dissatisfaction with regulated monetary systems and the current banking infrastructures.
In the long-term, as cryptocurrencies mature and evolve into a major asset class, Pandl noted that digital currencies like bitcoin will pose lower returns but demonstrate a high level of stability, like gold and other safe haven assets.
This commentary is validation to a certain degree among those who, for the last few years, have been pitching Bitcoin as the risk off asset among digital currencies and, certainly, it is beginning to be viewed that way among the general investor community.
In light of these developments it is not surprising that many are looking to digital currencies such as Bitcoin to invest in as part of their retirement portfolio. Paper markets have shown to be volatile, the most prime example being the GFC of 2008. Bitcoin serves as a hedge against the volatility of other assets.
CryptoWallet IRA has a team of cryptocurrency experts with vast experience turning digital currencies into beneficial assets within a 401(k) or IRA account. To discuss how digital currencies can form a profitable part of your retirement portfolio fill out the form on our website, or give us a call at (855) 630-1337.