Peter Brandt: Bitcoin should be viewed as an “insurance policy” against a worst-case scenario
Bitcoin has acted as a risky asset in recent weeks as the price followed the movements of traditional exchanges exactly. This has invalidated its safe haven status and made it vulnerable to massive short-term downward movements.
Although BTC is in step with the Dow Jones, the S&P 500 and other benchmark indices, an experienced trader and highly respected analyst is now finding that he believes investors should consider Bitcoin, gold and other precious metals as “catastrophic insurance policies”.
Bitcoin shows signs of an interruption in the coupling with the stock market
Yesterday the shares recovered slightly during trading, making up some of the losses. Nevertheless, both the Dow Jones and the S&P 500 closed with a minus of around 3%, while Nasdaq only fell by 0.3%.
The market decline allowed gold to rise over 5% as the safe haven bears some striking similarities to Bitcoin's price action. As BTC is currently trying to recover in the face of significant pressure on global markets, it is possible that it will soon detach itself from the stocks and develop some independent momentum.
Will BTC be insurance against a global catastrophe?
Peter Brandt, a prominent trader with decades of experience, recently stated in a tweet that from an investment perspective, he considers both gold and Bitcoin as insurance policies against a “worst case scenario” to be valuable.
“IMO, precious metals (GOLD and BTC) should be viewed as catastrophic insurance policies – not as investments. A premium is paid in the hope that the policy will never be needed. But when it is needed, the owner is protected from the worst case, ”he said, showing a comparison with Bitcoin and gold.
IMO, precious metals (#GOLD and $ BTC) should be viewed as catastrophic insurance policies – not as investments. A premium is paid, hoping the policy is never needed. But if it is needed, the owner is protected against a worst case scenario. https://t.co/JrMhQe0jIF
– Peter Brandt (@PeterLBrandt) March 23, 2020
Proof of text: newsbtc
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