Is Bitcoin the 'Digit Gold'——A Potential Safe-haven Asset?

Abstract

In this paper, we examine whether bitcoin has the potential to become safe-haven asset that can rival gold in the future. We observed, compared and analyzed and the performance of bitcoin and gold in face of a falling market and inflation pressure. We can see if investors can rely on bitcoin to reduce risk exposure significantly through empirical tests. At the end of our research, we found that bitcoin did not perform as well as gold did when faced with market crash and inflation. Therefore, we conclude that bitcoin does not yet show the potential to possess risk-proof merits as gold, the traditional high-quality hedge asset. Gold would probably remain the preferred hedge asset against cryptocurrency for now.