Why Cryptocurrency Could be a Safe Haven During Current Health and Economic Crisis

By AIT News Desk On Jun 26, 2020

Financialnewsmedia.com News Commentary

Even prior to the arrival of the current world health pandemic, many cryptocurrency believers have been confident in crypto’s ability to securely serve as a safe haven… a dependable defense against random chaos. A recent article by an industry insider observer, Cointelegraph.com discussed this, saying: “With the COVID-19 pandemic rearranging society at every level, the allure of a safe haven reigns supreme for our battered psyches. In the realm of financial instruments, the search for the safest of safe havens, also known as a store of value, has taken on a new urgency. (Are cryptocurrencies that) safe haven? Will cryptocurrency prove to be a store of value above all?” It continued: “Safe havens have long played a key role in economics and investing. Traditionally, a safe haven has been an investment in an instrument expected to increase its value during market uncertainty. Safe havens add diversification to portfolios and are crucial investment strategy components for retail players and institutional investors alike. Mentioned in today’s commentary includes: Ebang International Holdings, Canaan Inc. , Riot Blockchain, Inc., NVIDIA Corporation, Marathon Patent Group, Inc.

With their deep history in serving humanity’s sense of well-being, there is not surprisingly a long list of safe havens that predate Bitcoin (and other cryptocurrencies). These include commodities, United States Treasury’s and select fiat currencies, equity strategies and hedge funds, as well as more tangible assets such as precious metals (gold and silver), real estate and even art. Now, cryptocurrencies have been added to that list. Although Bitcoin’s origins are firmly rooted in a peer-to-peer electronic cash system, a funny thing happened on the way to fulfilling those utilitarian aims. Satoshi Nakamoto’s blockchain-based creation morphed into something much more akin to a security, as long settlement and transaction times make it a less attractive method of payment. Meanwhile, its rise in value over the last decade has far exceeded anyone’s expectations: Bitcoin has outperformed every other asset class including real estate, gold and the S&P 500.”

In a recent NASDAQ article, Ebang International Holdings, which makes equipment for cryptocurrency mining in China, announced terms for its IPO recently. In its latest filing, the company selected the Nasdaq as its listing exchange and added Prime Number Capital as an underwriter.

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The Zhejiang, China-based company plans to raise $106 million by offering 19.3 million shares at a price range of $4.50 to $6.50. At the midpoint of the proposed range, Ebang International Holdings would command a market value of $721 million.

Ebang International Holdings was founded in 2010 and booked $109 million in revenue for the 12 months ended December 31, 2019. It plans to list on the Nasdaq under the symbol EBON. AMTD Global Markets, Loop Capital Markets, and Prime Number Capital are the joint bookrunners on the deal.

The Cointelegraph.com article concluded: “Bitcoin’s financial status has evolved yet another step and is seen in many circles as a safe-haven instrument. Complete decentralization is at its core, keeping Bitcoin away from the whims of central banking and governments’ appetites for quantitative easing. In a brilliant stroke, digital scarcity is hardwired into its DNA: The supply of tokens is firmly capped at 21 million, a key characteristic that should continue to drive its price higher over time and has led to the widespread perception that Bitcoin equals “digital gold.”