Bitcoin, while taking an earlier beating over the coronavirus panic, has started to capture the media attention once again as it resurfaces as a potential financial hedge in the times of debt crisis.
News stories of central bank interventions have appeared to buoy the bitcoin price in the past month from the lows of $3 700 on Black Thursday all the way up to $10 000 in May. Until recently, Bitcoin has even outperformed most of the world’s currencies year-to-date including the dollar and yen — considered to be safe haven assets.
While the bitcoin price has seen some spectacular gains recently, it is important to remember that Bitcoin should still fundamentally be viewed as a risky tech investment. Due to its volatility, it still does not serve as a stable store of value. Assuming the price continues to rise in the coming years, it could, however, serve as an inflation hedge.
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