Time to burst a bubble. Bitcoin isn’t a safe haven asset.

And that’s a good thing!

Bitcoin is a revolution. A change in the way we exchange value. A shift in the established system. A radically alternative monetary policy.

It’s risky. It’s volatile. It’s exciting. It’s the best performing asset class of the year.

If you think bitcoin is just a safe haven, you’re not just wrong, you’re not thinking big enough.

Bitcoin: zero correlation to traditional markets

Just look at the chart below which tracks bitcoin’s performance in August (light blue) against the US stock market (dark blue) and an established safe haven, gold (orange).

The inverse correlation between gold and the stock market is pretty clear. But bitcoin cuts through this chart with almost no correlation at all.

The chart shows bitcoin for what it really is: a zero-correlation, asymmetric asset. It might not sound as sexy as a ‘safe haven’ but it’s actually much better. Bitcoin is an entirely new asset class, with its own cycles and catalysts, mostly unfazed by the traditional market forces.

Bitcoin’s safe haven narrative

Bitcoin’s story as a safe haven gained traction this year as fears of a recession flared up. Even major media outlets from Bloomberg to Business Insider to Forbes hailed BTC as the new sanctuary in the stormy market.

But if we look back at August, the narrative hasn’t quite worked out. The US stock markets plunged 2 percent, while safe haven gold climbed 8 percent. Other safe havens like the Japanese yen and bonds also saw huge inflows.

If bitcoin was a true safe haven, it would have seen similar action in August. Instead, it fell 8 percent. If anything, bitcoin acted like a risk-asset.

As analyst Alex Krüger explained, there was just one moment in August when bitcoin appeared to act to wider macro issues.

Today was the first time $BTC reacted sharply in *real-time* to a Trade War breaking headline or $USDCNY fix. pic.twitter.com/Usibh3bSD5 — Alex Krüger (@krugermacro) August 23, 2019

The best-performing asset class of the year

Bitcoin is a risk-on, asymmetric asset with no correlation to anything else in the market. That’s what makes it so special! Analyst Luke Martin summed it up best when he said:

“Bitcoin isn’t a safe haven asset yet, which is fine. In the meantime it can play the “best performing asset while having basically zero correlation to anything else” role in a portfolio.”

Bitcoin isn't a safe haven asset yet, which is fine! In the meantime it can play the "best performing asset while having basically zero correlation to anything else" role in a portfolio. pic.twitter.com/sJbmrXRQ5a — Luke Martin (@VentureCoinist) August 28, 2019

We need to stop forcing a narrative onto bitcoin that fits into existing market roles. It’s a new asset with its own rules and behavior.

To call it a safe haven, frankly, just isn’t ambitious enough.