CNBC: Bitcoin has significant risk-averse characteristics and is a must-have for investment

Last week, a CNBC report pointed out that investors should choose two assets to avoid being affected by the current economic uncertainty and financial instability in the United States. These two assets are overseas securities and digital gold Bitcoin.

Speaking on CNBC’s Trading Nation, BK Asset Management’s Boris Schlossberg stressed the need and importance of Bitcoin as part of an investment portfolio aimed at protecting against the impact of global economic turmoil.

He said:

Even though Bitcoin has risen 92% this year, its current trend is still relatively stable. Generally, after a big price increase (regardless of whether a certain tool is used), it will last for a period of time. Because this is a clear signal of rising demand. Therefore, I think Bitcoin is a safe haven that can support investment.

Economic turmoil

Fiat currencies, stocks, bonds and any other type of traditional assets, currencies and stores of value are severely affected by the performance of the global economy and markets. For example, the news that the Democrats called for the impeachment of US President Trump immediately caused the major US stock markets to fall 700 points.

On May 18, the uncertainty in the US economy caused by Trump's securities caused the price of Bitcoin to break through $1,820. Within 24 hours, the price of the currency rose by 7%.

At the time, Dennis DeBusschere of investment bank Evercore ISI explained that investors were concerned about economic turmoil caused by political instability. Although foreign securities are an effective safe-haven asset in an economically unstable environment, their low liquidity and non-transferability make this solution almost ineffective. In contrast, Bitcoin has demonstrated high liquidity and transferability, and can be easily traded during times of economic turmoil.

DeBusschere believes that the high demand for foreign securities and Bitcoin is caused by political uncertainty:

Political uncertainty has been surrounding us throughout the day and we will see lower market trends and increased volatility in the coming months.

Lack of Bitcoin Regulation

However, rather than elaborating on the significance of Bitcoin’s increased popularity as a safe-haven asset, CNBC focused on the rejection of the Winklevoss brothers’ Bitcoin ETF. However, the market has long since fully recovered from the SEC’s decision, realizing that Bitcoin investors do not need additional regulated intermediaries to facilitate Bitcoin transactions.

More importantly, the reason why the SEC refused to reject the ETF at that time was the lack of overseas regulation of Bitcoin, but this is not the case. Some countries, including China, Japan, the Philippines and South Korea, have already introduced strict KYC (Know Your Customer) and AML (Anti-Money Laundering) policies.

CNBC producer Rebecca Ungarino said:

Bitcoin, which is highly volatile due to its unregulated nature, has hit record highs this year as the currency has become widely accepted as a payment method. However, the SEC still rejected a Bitcoin ETF application earlier this year.