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Bitcoin acts as a safe-haven asset during periods of crises, claims Bernstein

Bitcoin acts as a safe-haven asset during periods of crises, claims Bernstein   BTC/USD -2.68% Add to/Remove from Watchlist Add to Watchlist Add Position

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By Sam Boughedda

Bernstein analysts said Friday that Bitcoin acts as a safe-haven asset in times of crisis.

The analysts explained in a note titled “Bitcoin vs. Gold vs. Equities correlation in 3 charts” that the correlations have flipped for risk-off assets in the last few days since the U.S. banking crisis, and it “could be a critical signal for investors to monitor.”

“The correlation with equities rose, as the pandemic policy response led to increased correlation amongst assets with cheap money shoring up different asset classes,” wrote the analysts.

They added that as rates were hiked and money tightened, Bitcoin and equities were initially correlated on the downside, but since the demise of FTX, “crypto has come back stronger than equities and recently, since the U.S. banking crisis, diverged even more.”

“The correlation with gold is spiking — and has done in periods of crisis,” the analysts argued.

Overall, Bernstein believes that as the banking crisis in the U.S. deepens, Bitcoin is more likely to behave as a risk-off asset and that post the FTX demise, “crypto is back to its roots.”


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