- Bitcoin is young for a hedging asset but has immense potential in the future.
- Bitcoin gains 47% between May 5 and May 31 amid the US-China trade dispute.
New research from one of America’s leading digital asset manager, Grayscale says that Bitcoin was the winner during the United States-China trade war. The asset manager was updating the “Hedging Global Liquidity Risk with Bitcoin,” research published in 2016 detailed that BTC rose 47% between May 5 and May 31 while in the same period the Japanese yen gained only 2.1%.
As Bitcoin surged, tradition assets explored the rabbit holes following the trade dispute. According to the research Nasdaq Composite index tanked 8.7% becoming the worst performer among the global equities.
Grayscales director of investments and research, Mathew Beck said in a comment:
“While the drawdown appears to be in its very early stages, Bitcoin is getting a jump before these risks are fully reflected in other asset prices.”
The research concentrated on an instance when Bitcoin has gains following geopolitical instability along this year with Brexit being a major contributor as well. Grayscale still believes Bitcoin has not matured to be a hedging asset but confirms that it has great potential in the future.
Beck said in conclusion:
“While it is still very early in Bitcoin’s life cycle as an investable asset, we have identified evidence supporting the notion that it can serve as a hedge in a global liquidity crisis, particularly those that result in subsequent currency devaluations,”
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