Nik Bhatia, founder of The Bitcoin Layer, said the 15-year-old bitcoin is still too immature to be considered a safe asset. In an interview with CNBC published Tuesday, Bhatia said that Bitcoin has traditionally been viewed as risky due to its relatively short history.
The financial researcher, author of “Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies,” noted that Bitcoin often reflects stock market movements. It usually fluctuates along with stocks. However, he pointed to times when Bitcoin has moved away from the stock market, showing significant growth during those periods.
Bhatia believes that these episodes show Bitcoin’ s potential as a hedge against excessive monetary and fiscal policies over the past decade. He believes that Bitcoin is striving to become a safe asset. This would protect investors from the inflationary effects of these policies.
“However, because Bitcoin is a young asset, it is still mostly traded like a risky asset. And that’s why you see it falling along with global equities this week.” – He added.
Bhatia remains optimistic about Bitcoin despite the recent decline
Bitcoin fell more than 10% on Monday, reflectinga broader market decline, before rebounding slightly on Tuesday. The crypto asset has fallen 16% over the past week. Despite the recent decline, Bhatia maintains his bullish stance on Bitcoin, citing significant capital inflows into the cryptocurrency market.
“Bitcoin historically tends to fall 25% to 50% in the middle of its declines,” he noted. “Although I understand that this can be very scaryfor many holders right now.”
