10/05 ANDY HOFFMAN (CryptoGoldCentral.com): Bitcoin, The “Fear Gauge” – I.e., The NEW SAFE HAVEN

When Bitcoin first bottomed at the “Hoffman Line” (a $100 billion market cap) on February 6th; as Adam Meister and I taped our “All Out Bitcoin Optimism Fest”; few noticed that that Dow was down more than 1,000 points that day, given the pessimism, and fear, in the cryptocurrency markets.

Bitcoin’s bottoming simultaneous with the biggest Dow decline in years may well be “coincidental” - due solely to the Mt Gox Trustee running out of the 8,000 BTC he was selling the very moment the Dow plunged. Or perhaps, as I suspect, it was due to a genuine market reaction to FEAR.

As someone who spent 15 years as an all-in investor, and one of the world’s most well-known Precious Metal commentators, I’m well versed in their historic role as safe-haven assets, during times of severe inflation AND deflation. Until Bitcoin, they still held a leadership role in that realm. However, due to Central bank bond monetization – i.e., QE and ZIRP/NIRP – Treasury bonds have been the best bet during recent deflationary crises, like 2008. To that end, what we actually saw at the height of the 2008 crisis was PHYSICAL gold and silver maintaining their value, but PAPER metal bombed into oblivion – and mining stocks, given that mining contracts are based on paper prices.

In other words, Precious Metals did not serve that role in 2008, as it had during prior crises – and since then, despite exploding debt, rising inflation, and unprecedented Central bank money printing and monetization (yielding record-low real yields), Precious Metals have been the market’s worst-performing asset class.

Moreover, their “safe haven” status appears to have died, too, given their lack of response to essentially any political or economic crisis since – or, for that matter, severe market declines like yesterday’s…during which, stocks AND bonds declined. And take a guess which asset performed the best yesterday? Yep, Bitcoin!

https://twitter.com/Andy_Hoffman_CG/status/1047913668745162752

As Bitcoin maintains its valuation above the Hoffman Line; its network grows faster, stronger, and more secure; and additional institutional custodial products and services are offered; I have ZERO doubt that whatever safe haven leadership Precious Metals still have will be usurped.

https://twitter.com/cryptomanran/status/1047984196960964608

As for Treasury Bonds, which are plunging again today - well-below the danger level I first identified nearly five years ago; the biggest bubble in financial history can only be saved by MORE money printing and monetization. Which, given ALREADY record-high global debt levels and inflation readings (hence, the exploding “Emerging Market” currency crisis), could catastrophically backfire if inflation expectations are BOOSTED, as they should, by increasingly inflationary monetary policy; i.e., the way ALL fiat currency regimes have died throughout history.

https://www.milesfranklin.com/3-0-nuff-said/

According to a trader interviewed by CNBC, "Bitcoin is sort of becoming the new VIX, in getting ahead of credit risk in the banking industry”…”there is huge correlation right now between VIX and Bitcoin 30 trading days ago, that is starting to measure out credit risk in the market. That's what cryptocurrency is becoming. It's becoming a way to sort of de-risk yourself from credit risk in the banking industry."

https://www.cnbc.com/2018/05/29/bitcoin-is-the-markets-new-fear-gauge-investor-says.html

In other words, it’s very possible that aside from its other, myriad use cases, Bitcoin may become the world’s top safe-haven asset!