Investors are buying bitcoin because they expect extensive returns not because they see it as a safe-haven asset, according to Marcus Swanepoel of London-based cryptocurrency firm Luno.
The chief executive officer told Reuters that investors tend to move a small portion of their portfolio to bitcoin in times of market fluctuations. But their intention to move capital into the cryptocurrency market comes from the place of profit-making, not hedging. Investors merely bet on a profitable outcome should it gains global attention as a safe-haven asset, and their speculation could go either way.
“If you’re wrong, you’re not losing lots of money, but if you’re right we are talking outsized returns,” said Swanepoel.
The Correlation That’s There But Not There
The statement followed a week of turmoil in the global stock market. On August 1, United President Donald Trump threatened that he would slap an additional 10 percent tax on $300 billion worth of Chinese goods. In retaliation, the People’s Bank of China pushed the Chinese Yuan to its eleven-month low, while Beijing announced that it would purchase agricultural products from the US. Read More at NewsBTC...