A Word From A Crypto Investment Firm CIO
The CIO of Ikigai Asset Management, a crypto investment firm, Travis Kling recently tweeted a description of Bitcoin as insurance against hurricanes as well as U.S. fiscal policy. In a tweet from March 20, Kling noted that the US economy is soon to be hit with an incoming financial hurricane which will “do a lot of damage”. But he advises that not all is lost as the recent crash in the crypto market has made half-priced hurricane insurance widely available to all for acquisition:
“You can still buy hurricane insurance. People panic sold the insurance policy bc they wanted cash. Now it’s half-priced from a month ago even though the hurricane is clearly here now.”
Bitcoin Likened To “Hurricane Insurance”
Earlier on the same date, Kling called Bitcoin “an insurance policy against the largest monetary experiment in human history”. This tweet was accompanied by a graph featuring recent annual US budget deficits.
Following President Donald Trump’s travel ban announcement on March 11, 2020, Bitcoin suffered a nearly unprecedented 50% plummet inside of a 30-hour window, with this crypto market meltdown leaving in question Bitcoin’s long-standing safe-haven status presumption.
Is Bitcoin Stil A Safe-Haven Asset?
There have been many people in the cryptocurrency sphere that appeared not to be naive with regards to the effect on crypto markets, and how they would be impacted in the case of a recession or another type of financial shock. In a tweet from January 3rd, Andreas Antonopolous noted that crypto markets will most likely crash very hard during any sort of mainstream financial meltdown.
“And the reason it will crash hard is that a lot of the venture capital, corporate investments and private investment from individuals that is based on cheap money and disposable income and excess cash in portfolios, etc., like any other part of the economy, will dry up.”
These sentiments were echoed later by Anthony Pompeian, the co-founder of Morgan Creek Digital on the March 12th episode of his podcast. Pompliano stated that the crash was prompted by a liquidity crisis. In such a situation investors rush for the exits in a race to realize fiat.
He also predicted that Bitcoin, much like gold during the 2008 financial collapse, will recover rapidly from the liquidity crisis as governments begin to cut interest rates and begin to initiate quantitative easing. This will drive investors to “safe haven assets” and smart monetary commodities.
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