Bitcoin is not behaving like a safe-haven asset as fears of recession shadows over the US economy, believes Travis Kling of multi-strategy crypto asset hedge fund, Ikigai Asset Management.
Bitcoin Yet to Shine
The founder & CIO on Wednesday referred to bitcoin’s dwindling price action against an already gloomy macroeconomic outlook. Recognizing that investors should have perceived the cryptocurrency as a safe-haven asset by now, Kling doubted whether or not the nascent asset is ready to assume the responsibility like its established peers, including gold.
“It’s like maybe BTC is strong enough to swim in the pool right now but not in the ocean,” he added.
Lots of talk about BTC as a safe haven lately. Hasnt acted like that last few days. Why?
Could be crypto specific mkt structure issues. We see those right now
Could also be BTC is strong enough to act as a safe haven to an extent and for certain types of stress, but not all.
— Travis Kling (@Travis_Kling) August 14, 2019
The statements came after the Dow Jones registered its worst performance of the year over a 24-hour timeframe. The index tanked by 800 points, prompting investors to flee to safety in traditional hedging assets like bonds, gold, or even Japanese Yen. Bitcoin, at the same time, appeared like an unnerving asset to those investors. The cryptocurrency slipped close to 9 percent on the day, bringing its weekly losses to as much as 14.40 percent.
Meanwhile, US stocks disappointed on Thursday as the yield on the 10-year Treasury fell to a three-year low.