In its weekly report on the state of the network on August 6, Coin Metrics shows empirical evidence that <a href="https://www.cryptoknowmics.com/crypto/bitcoin-ath-2019-%F0%9F%A4%9E-boxmining-interview-china-trade-war-recession-crypto/">bitcoin</a> could be considered a refuge asset, the category referred to by investors as safe-haven assets or investments that are expected to maintain or increase in value in times of recession or economic turbulence.

Several global events of "high levels of geopolitical risk" have taken place in recent months, <a href="https://coinmetrics.substack.com/p/coin-metrics-state-of-the-network-f19?token=eyJ1c2VyX2lkIjozMzI4MTksInBvc3RfaWQiOjEwMDc2OSwiXyI6Ik11b0dmIiwiaWF0IjoxNTY1MDkzMjc1LCJleHAiOjE1NjUwOTY4NzUsImlzcyI6InB1Yi02MjY5Iiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.x81FpPg23SD5Bt_obuUQahW1ASgSAzCWzhNuj3GYIfE">says</a> Coin Metrics, including trade tensions between China and the United States, the risk of fragmentation of the European Union and the possible disruption of oil shipments in the Persian Gulf. All this configures a typical situation in which investors move towards refuge assets, and just bitcoin has registered a sustained boom during 2019, says Coin Metrics.

In this macroeconomic environment, bitcoin has experienced strong gains this year, which have coincided with similar gains from classic safe-haven assets - especially gold, among these, but also sovereign bonds, the Swiss franc and the Japanese yen. This relationship has breathed new life into the narrative that bitcoin can serve as a refuge asset as well.

Coin Metrics. Network status report, August 6, 2019.

The authors of the report acknowledge that it is not easy to support this bitcoin hypothesis as a refuge asset, because there are many interdependent variables that can affect price. However, they examined the behavior of the BTC price and its volume around the periodic meetings of the Federal Open Market Committee (FOMC).

The FOMC holds 8 meetings per year, from which a written statement on economic policies emerges, usually presented at a press conference, including a question-and-answer session in which the Federal Reserve Chairman participates. Coin Metrics studied the evolution of the BTC price and volume before and after the last 16 FOMC meetings, as it is common to observe "an immediate reaction of the price of prominent assets (e.g. gold, bond yields, stocks, securities) at the time the FOMC pronouncement is published".

<img class="aligncenter" src="https://www.criptonoticias.com/wp-content/uploads/2019/08/fomc-meetings.jpg" alt="bitcoin activo de refugio" />
BTC price behavior 12 hours before and 12 hours after the last 16 FOMC meetings. Source: Coin Metrics.
The BTC price has not changed in the last 16 meetings of the Federal Open Market Committee.
Bitcoin can be perceived as similar to gold, the Swiss franc, and other safe-haven assets.

An analysis of Bitcoin's price in relation to Fed meetings shows that, with few exceptions, Bitcoin is insensitive to such macroeconomic surprises. [...] Even assuming a delayed bitcoin reaction, its price reaction is generally attenuated in contrast to traditional assets, including refuge assets with which bitcoin is frequently compared.

Coin Metrics. Network Status Report, August 6, 2019

The FOMC meeting with the greatest impact this year, says Coin Metrics, was the one held on March 20, in which a major change in the U.S. Federal Reserve's usual policy recommendations was evidenced by the publication of interest rate reduction projections from two to zero.

This led, says Coin Metrics, to a rally of sovereign bonds while the dollar declined. "Despite this unexpected Fed pivot, the bitcoin price was insensitive," the report says.

Coin Metrics: bitcoin could qualify as a safe-haven asset in the face of recession

I am an industrial engineer specializing in blockchain. Enthusiast of cryptocurrencies and writing the latest news regarding the Crypto world.

Coin Metrics: bitcoin could qualify as a safe-haven asset in the face of recession

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