Bitcoin Moves Closer to a Safe-haven Asset in 2017?
In the first quarter of 2017, the total market of cryptocurrencies added nearly＄7 billion in value.
As the chart shows, top 14 most valuable currencies based on market cap saw dramatic price gains but Litecoin. (Litecoin price dropped by 6.9% in the first three months of 2017, but it rises as Segwit heads for activation.)
At first glance, Bitcoin’s performance during Q1 2017 was more muted with an increase of 10%. But a silver lining behind this is that Bitcoin has become more mature.
There is evidence that bitcoin has become a more mature asset class over time in that its volatility has been decreasing, which helps bitcoin move closer to be a safe-haven asset.
Bitcoin optimists believe that 2017 will mark a turning point for Bitcoin to be recognized as a safe-haven asset. For the one hand, Bitcoin has gained more popularity around the world. If you search for “Bitcoin” on Google, you will realize that bitcoin searches are rising in 2017 in many countries around the world and bitcoin users have doubled every month since 2013.
For the other hand, 2017 also witnesses more enterprises, central banks and governments of all levels are tapping into the potential usage of Bitcoin and its backbone technology Blockchain. Plus, countries like Japan and Philippines have officially made Bitcoin a legal method of payment in 2017. And it’s reported that Russia and India are also working to legitimize Bitcoin as payment method. On April 12, the Indian government set up an Inter-Disciplinary Committee to study cryptocurrencies. And a report from CNBC India on April 20 reveals that the Indian government is leaning toward granting legality to Bitcoin and virtual currencies in the country amid regulations with taxes to be levied on adopters.
We could expect that strict regulations will be applied to Bitcoin, and thus help make it a legal payment method, even a mainstream currency.