US stock market slide indicators show the deepest warning signals since the pre-financial year 2 crisis. Now the question is: in the event of a US economic crisis, can Bitcoin be a safe haven for investors to protect investors?
Scary summer for the US market
Bitcoinist reports that the summer months are usually a period of stability in stock markets, but after the recent decision by the Chinese government to intensify the trade war and weaken its currency against the dollar, the US main stock market on Monday was the worst. They experienced their trading day in year 2019
Increasing doubts about these events can have a significant impact on the financial markets. So it's no surprise that investors start selling their shares. Among the noises of the trade war, one factor that has been forgotten is the reversal of the yield curve in US Treasury markets. The risk is heightened when, since the 1960, eight recent US downturns occurred just after the yield curve was reversed.
US economic indices have been largely stable, for example, the GDP has grown 3.1% annually, and the unemployment rate is currently at its lowest level of fifty years, at 3.7%. However, recent fluctuations in the securities market indicate that investors are worried about early risks that could seriously hurt the prospects of both business and consumer groups.
The rush of capital to Bitcoin?
The key question now is whether the bitcoin market is capable of responding to any imminent turmoil in the US securities market. More attention to digital currencies has occurred this year in periods where either the stock market has been declining or economic reports have indicated macroeconomic weaknesses in the future. Traditional safe market reserves include assets such as gold, bonds and the US dollar, while two of the three listed assets are directly affected by the negative effects of the yield curve.
Gold is the only exception to this traditional set of assets, so it is not surprising that digital currencies are also benefiting from recent economic developments, because in addition to gold, the digital currency market can also be a good option.
Finally, digital currency investors will be watching to see if this market is really ready to redefine bitcoin as a safe investment fund. The recession has almost always been accompanied by a decline in stock market investment, and traditional equity investors are looking for other places to hold their wealth.
Can Bitcoin win these kinds of scenarios? Of course we still have to wait. However, recent trends indicate a growing tendency to invest in digital currencies among investors, especially when all other markets are in a downward trend.
Can Bitcoin Protect Investors in Case of US Depression? Time will determine everything.