On Monday, during my weekly sit down with America’s most-watched business TV host, Stuart Varney, the topic of a flight to safety came up. A flight to safety is when investors sell what they perceive to be higher risks investments for safer ones.
But Stuart didn’t want to know about your traditional, run-of-the-mill flight to safety in assets like gold or U.S. treasuries. Instead, he asked about one of the newer assets available to investors these days…
Stuart mentioned that Bitcoin had recently reached its highest level since October, and asked me if the cryptocurrency’s big move up since early December was due to a flight to safety over coronavirus concerns.
Take a look…
Stuart is likely correct that the coronavirus scare has led many to seek a safe haven that can still deliver profits in the event of a market downturn.
But there’s a major Reality Gap that has formed between what investors believe Bitcoin will do in a market downturn or recession and how the cryptocurrency will actually perform.