Trade Wars: is Bitcoin the New Hedge?
Trades Wars between US and China creates market turmoil
US stocks saw deep losses Thursday amid escalating trade tensions as President Donald Trump planned to unveil roughly $50 billion in tariffs on Chinese exports.
Business Insider
Major stocks have dipped since the announcement of US's direct tax tariffs on China exports. Currencies, bonds and commodities have also been affected by the news (see Bloomberg.
The point of discussion here: Is Bitcoin the new hedge?
A hedge is a fund that describes market movements usually in the opposite direction. Historically, Gold has always been a hedge against stock market crashes. Gold prices have been going up for the past week during this market turmoil.
Will we experience the same trend with Bitcoin?
While merely speculation right now, we do see Bitcoin and many of the cryptocurrencies as "escape routes" for big investors to gain a hedge against falling stock market prices. Bitcoin is built with a fixed quantity like gold and other commodities and as long as someone believes in the value of Bitcoin and holds it long enough, it is here to stay.
As any investor would say, "Diversify."
Ups and Downs are just part of life.