The traditional move would be to hedge against stock volatility with gold. This has proven an effective method in the past, but a new alternative is challenging the old-school safe-haven. Bitcoin is a flashy new asset with all the properties of a currency, but with some unique features that make it a viable haven. These differentiators, along with a vocal and loyal backing, have led Bitcoin to become an alternative means to reduce exposure to stocks safely.
Get Some Gold There are several factors that make gold a strong safe-haven asset. Regardless of demand, supply remains disproportionately low.
Gold cannot be manufactured like a company issues new shares, or a federal bank prints money. It must be dug up from the ground and processed. The precious metal used to be tied to the Dollar until when President Nixon severed the ties between the US currency and gold as a base.
Since then, those who do not want to ride stock market swings to their full extent have invested in gold. As seen in the chart below, gold is a good asset to have in a bear market. Plus, as more people flee stocks and invest in gold, the price rises accordingly.
Why Bitcoin is Gaining Traction
In fact, it has so many exchanges that Bitcoin cannot even compete with. There are only a few exchanges that are different from each other. If enough of these exchanges experience issues down the road, this can cause a crisis in confidence that may affect Bitcoin value.