A good number of investors these days are realizing the real value of bitcoin -- and how it is touted as the "go-to" refuge when everything else in the economy starts to go sideways.
Cryptocurrency, Bitcoin (BTC) to be precise, has become more attractive to businessmen because it is immune to a direct shock caused by economic, political and other market disturbances.
Being naturally autonomous and uncontrolled by government regulation, digital currency is sovereign and ungoverned by the policies and limitations set forth by a federal financial institution or government official.
Bitcoin's 'protective lining' helped it hit recent multi-month peaks as global recession fears triggered a gloomy equity sell-off in key markets around Asia, Europe and America. In layman's terms, investors seek cover in the virtual currency because they are left with no other choice.
Sharing his views on crypto with Market Insider, Ampleforth chief executive officer Evan Kou pointed out that, in an economic imbalance, only a handful of safe assets are inaccessible, "since the world economy is so intertwined."
In this connection, bitcoin is not limited or subject to the same market pressures as that of normal currency. And for digital asset platform Bibox co-founder Aris Wang, this is the reason why people who distrust the government perceive the crypto as a better alternative.
However, as is the nature of electronic assets, bitcoin and its peers are unpredictable. For instance, even after bitcoin breached the $11,000 boundary due to global macro-economic jitters, it has since retreated under the $10,000 mark.
But the good thing about bitcoin's shaky and erratic characteristics is that it can work to its own advantage, as long as it is not shackled to the same forces that dictate the movement and behavior of stock markets.
Kou stressed that there has been almost "a decade worth of verifiable information to prove that cryptocurrency has nearly zero risk-exposure" to equities, precious metals, commodities, currencies, to name a few. Compared to other assets, bitcoin offers more opportunity to earn better returns on investment, he added.
Economies being hounded by currency setbacks have witnessed the world's most talked-about crypto trade at a premium on domestic forex exchanges, Interfax co-founder Daniel Dixon, observed. Take the case of Venezuela and Argentina - two nations where inflation ballooned as a result of political turmoil. Here, virtual currency trading remained steady and, in fact, grew, Dixon told Markets Insider.
