August 12, 2022

Hedge or cyclical? Eternal debate on Bitcoin’s status sees a new twist

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One of the most enduring cryptocurrency-related narratives revolves around the search of crypto’s definition as an asset class. Is Bitcoin (BTC) more of a digital currency or digital gold? Do its unique properties warrant viewing it as something completely distinct from the established categories of financial instruments? A recently published report by JPMorgan Chase’s strategists has sparked yet another round of such debates.

The conclusions that the report presents are at odds with the “Bitcoin as a safe-haven asset” trope that has become somewhat conventional wisdom lately. The authors contend that the original cryptocurrency is actually not that great of a hedge in a situation when markets are undergoing severe stress and that expansion of retail ownership has rendered it more similar to a cyclical asset that moves up and down along with the stock market.

It’s reasonable to discuss the argument of JPMorgan’s analysts with finance-savvy commentators to assess its strength, as well as to weigh in on what the recent developments in crypto markets can tell the general public about the nature of digital assets as a class.

different kind of hedge

A goodTitle: Hedge or cyclical? Eternal debate on Bitcoin’s status sees a new twist
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Published Date: Thu, 04 Feb 2021 17:18:15 +0000