Bitcoin is increasingly becoming viewed as a safe haven asset in the case of a recession in the United States and the world. Recent events have proven that uncertainty in the stock market drives investors to Bitcoin. A move such as the United States delaying tariffs removes uncertainty from the market, as the Chinese have no need to respond with punitive measures of their own such as increases in internal currency manipulation or decreases in bilateral trade.
Recently, this increased outlook of stability caused markets to jump 2–3% and Bitcoin to dip 5% in early trading this past week. On the other hand, Bitcoin also saw itself trading at a massive premium in Argentina after their stock market dipped 37% following the news of President Macri’s unexpected primary defeat. Thus we can see that the complexity of international geopolitical events manifests itself in movements of Bitcoin price. Fundamentally Bitcoin exists as a worldwide currency acting and reacting to global events.
Originally deployed in 2009 as a non-correlated asset to the US dollar, Bitcoin is finally realizing its potential and growing into the world’s reserve currency. As individuals around the world lose faith in governments to provide stability, they are being drawn to the systemic stability offered by Bitcoin’s hard mathematical backing. Bitcoin is systemically stable because of the electricity and computing power backing its network, as well as it’s predetermined deflationary monetary policy.
The amount of new Bitcoin entering circulation halves every 210,000 blocks (4 years) in planned obsolescence events meant to upgrade the network’s resilience and hashing power. By making old hardware unprofitable and forcing miners to upgrade their machines, the whole network becomes more robust overall. These halving events also serve to stem the flow of new Bitcoin entering the network, up until Bitcoin reaches its planned maximum of 21 million Bitcoin. This formula in theory should create scarcity and boost the price of the asset, creating a truly viable store of value for the globe. As the global instability mounts this inherent stability becomes highly important.