Are Bitcoin and Cryptocurrencies True Safe Havens? Analyst Weighs In
Despite Growing Popularity, Bitcoin Remains a “Risk-On” Asset, Says Expert
As global markets experience turbulence, the debate over whether Bitcoin and cryptocurrencies can serve as true safe-haven assets has intensified. However, according to Moneta’s Chief Global Market Strategist and Senior Investment Advisor, Aoifinn Devitt, the answer is clear: Crypto remains a high-risk asset rather than a stable hedge against financial uncertainty.
Crypto Volatility Challenges Safe Haven Narrative
The conversation gained momentum after Ethereum plummeted 27% on Sunday, sparking renewed concerns about the stability of digital assets during economic downturns.
Devitt dismissed the idea that Bitcoin or other cryptocurrencies can serve as a reliable store of value during market chaos, stating:
“I never called it that. I’m not sure who holds that position as an advisor. We don’t yet have enough information about this asset class from a 360-degree perspective to determine how it would perform in the event of a market crash.”
According to Devitt, Bitcoin and other digital assets remain highly volatile and deeply influenced by macroeconomic factors like inflation and interest rates, making them far from the safe-haven status of gold or U.S. Treasuries.
Bitcoin: Digital Gold or Just Another Risky Asset?
While Bitcoin has been frequently referred to as “digital gold,” Devitt remains skeptical about this comparison.
“It may be on par with gold in terms of acting as a hedge in a portfolio, but only as a hedge against fiat,” he explained.
Despite Bitcoin’s growing reputation as an alternative to traditional money, demand for fiat currencies—especially the U.S. dollar—remains strong. Devitt emphasized that cryptocurrencies have yet to prove their ability to act as a true financial safe haven, especially during times of global economic uncertainty.
Bitcoin ETFs Make Crypto More Mainstream, But Not Safer
With the rise of Bitcoin exchange-traded funds (ETFs), cryptocurrency has become more liquid and accessible to mainstream investors. However, Devitt warns that increased adoption does not equate to reduced risk.
“We are not in a safe haven area, but we are in a more accessible market,” he stated. “It is a relatively calm place, but it is by no means a safe haven.”
Final Thoughts: Is Bitcoin a Safer Bet Than Other Cryptos?
While Bitcoin remains the most stable and widely recognized cryptocurrency, it still carries significant risk. Devitt acknowledged that Bitcoin is less volatile than assets like Ethereum, making it a better option for cautious investors entering the crypto space.
“Bitcoin is definitely seen as the first cryptocurrency. If you want to take a little bit of risk with less volatility, Bitcoin could be a good place to start,” he said.
Despite its increased legitimacy and institutional adoption, Bitcoin is not yet the financial refuge that many investors hope for. As crypto markets continue to evolve, the safe-haven debate remains far from settled.
