Buy Bitcoin as a hedge against global turmoil

Bitcoin is called a SOV (Store of Value) by many in the cryptocurrency space and this label has found its way in the mainstream financial media. Bloomberg Television and CNBC both regularly quote the digital asset as being a Store of Value when interviewing people in the space. Recently, Anthony Pompliano (or just Pomp as his followers on Twitter refer to him), a guest on the CNBC show called “Squawk Box” made the case to buy bitcoin as a hedge against global turmoil.

“institutions have spent decades looking for non-correlated assets that they can use as diversification on their portfolios. We have been banging the drum for over a year now, saying this is a non-correlated asymmetric asset.”

Pomp went on to explain Bitcoins rise whilst there has been turmoil both in the financial and political sphere:

“If you look at times of instability in the global markets, like in May, when we were lobbying tariff threats and the trade wars were ragging on, Bitcoin is up 85%, it has -0.9 correlation to the S&P and -0.8 to gold.”

Pomp believes that with time more and more people will look to Bitcoin to protect their wealth, not wanting to be at the mercy of unaccountable governments and corporations. This type of Safe Haven status will likely lead to mainstream institutions diversifying into Bitcoin as a hedge against black swan or outlier events.

He added:

“We have seen this before, in countries like Venezuela where the country’s currency has failed them, people started putting their wealth into Bitcoin. They are small countries though, now we are seeing this play out in one of the largest countries in the world, so with 27 Trillion in deposits in Chinese banks, if only 1%of that moves into Bitcoin that would double the market cap of all Crypto”

There is no doubt that the mainstream media are giving Bitcoin a little more credit for being a viable store of value and hedge against economic turmoil. Anthony Pompliano goes as far as to say that it would actually be irresponsible for a portfolio manager not at least have a small percentage in Bitcoin, just in case. 

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