Bitfinex Identifies Bitcoin as a Safe Haven Amid Recession Risks

Bitcoin has the potential to serve as a safe haven during an economic downturn, even though the broader cryptocurrency market may suffer. This assertion was made by Bitfinex, reports The Block.

Experts noted that over the past three months, central banks worldwide have implemented 35 rate cuts. Such a rapid pace reminded them of the 2009 crisis, when a peak of 76 similar actions was recorded.

“The shift of investors towards safer assets and the decline in government bond yields are classic indicators of a recession, reflecting a lack of confidence in sustainable economic growth,” the analysts indicated.

Nansen concurs with the view of increased chances of an economic downturn in the second half of 2024. Experts assessed the probability at 40%, which is higher than the historical average of 17%.

According to Bitfinex, such concerns could support bitcoin due to its status as “digital gold” and exert pressure on the broader cryptocurrency market.

“Altcoins may suffer due to reduced liquidity and a weakening risk appetite. Investors might exercise caution, redirecting funds into safer instruments,” the specialists warned.

Previously, former BitMEX CEO Arthur Hayes described bitcoin as a more reliable safe haven asset than gold, due to the absence of national control.

Earlier, ForkLog discussed with experts the reasons for the market dump and identified conditions under which major coins might begin to recover in price. Details can be found in the article.