- Bitcoin could be embraced by investors as a safe haven store of value
- The digital currency is becoming a mainstream asset according to Ari Paul
Bitcoin (BTC) has been expanding in the market as a new asset class that aims at revolutionizing the way in which many individuals perform transactions and store value. Although the virtual currency has also been used as a speculative asset, there are many use cases about it. Ari Paul, a recognized investor, explained that Bitcoin is gradually entering the mainstream financial discourse.
Bitcoin as a potential "safe haven" asset is gradually entering the mainstream financial discourse. https://t.co/vKybSvOjou
— Ari Paul ⛓️ (@AriDavidPaul) July 3, 2019
Bitcoin Is Becoming A Mainstream Asset
According to Mr. Paul, more mainstream investors from traditional financial markets are starting to pay close attention to how it performs during periods of uncertainty in the market. This shows that there is an interest in the virtual currency regarding its qualities as a safe haven asset.
There are many investors that consider that Bitcoin is far too risky to be considered a safe asset during economic turmoil. Once the digital currency reached its highest point of $20,000 in December 2017, a year later, the virtual currency was traded almost 85% under that price level. Thus, this does not seem like an attractive investment for those searching for a store of value.
However, Bitcoin is a scarce asset. There are 21 million BTC that would be ever mined and during periods of high demand, the price of the virtual currency would clearly go up. Not even gold offers the scarcity that Bitcoin has since the precious metal could be discovered in many new places in the future, increasing the supply in the market. With Bitcoin, this cannot happen.
Next year, Bitcoin is going to experience a halving event in which the virtual currency will be reducing its new issuance from 12.5 BTC to 6.25 BTC per block, which is something bullish for Bitcoin that would reduce its annual inflation to 1.8% during the next four years.
According to data provided by CoinMarketCap, Bitcoin is currently being traded around $11570 and it has a market capitalization of $205 billion.