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Bitcoin's uncertain status as a safe haven investment

Darryn Pollock

Bitcoin is a leading global hedge at a time when the US-China trade war is heating up, according to a new report from crypto insights and analysis company SFOX.

San Francisco-based SOFOX analyzed price, volume, and volatility data from eight major exchanges and liquidity providers, to reach its conclusions about the state of Bitcoin. Its biggest takeaway: people are investing in it to hedge against global financial uncertainty.

However, SFOX’s conclusion are partly based on claims that the S&P 500 is currently negatively correlated with Bitcoin and all leading cryptocurrencies. According to its data, Bitcoin showed a -0.4 correlation (on a scale between 1 and -1) to the S&P 500. In contrast, Bitcoin showed a strong, positive correlation with other cryptocurrencies—which is hardly suprising since they tend to move together.

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Mati Greenspan, Senior market analyst for eToro, disagrees with the conclusion. In his daily market update, he posted a graph which indicates that there is little or no correlation.

His concerns were matched by goldbug and Bitcoin skeptic, Peter Schiff, who believes it may be pure speculation. Schiff tweeted: “The Chinese aren't buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven!”