Bitcoin gets spooked, fails future safe-haven test
Digital currencies are perceived to be above regional crisis and political strife. They should be, in general, insulated from everything that ends up spooking traditionally traded items, such as stocks or metals. However, post a provocative nuclear test by North Korea, we are witnessing the haven of future balking under the tremors, something which it was supposed to be immune to. Here's more.
It's quite unexpected
Bitcoin is the most popularly traded cryptocurrency. However, in the wake of global tension arising from North Korea's nuclear program, gold and even the Japanese yen is outperforming it. Tokyo is only 800 miles away from Pyongyang, the capital city of North Korea and it's still putting up a better show than the non-state-controlled cryptocurrency. Cryptocurrencies aren't holding up their end of the bargain.
Although it's not supposed to be region specific
The recent drop of crypto assets has been attributed partly to China's crackdown on ICOs. China's inspection committee placed a ban on the ICOs, saying some of them are financial scams and they have "seriously disrupted the economic and financial order." China hosts one of the most active Bitcoin communities in the world. Therefore, the aftermath, of this ban on cryptocurrencies, is understandable.
It has to be near shock proof
However, these incidents and their subsequent tremors in crypto assets, kind of, defeat its purpose. Earlier, investors hoarded gold during a crisis because it was a safe bet. Even now, in certain corners, it's the way to go. Cryptocurrency will never emerge truly as a reliable future asset if it's unable to prove itself immune to such incidents. It's still in its nascent stages.
