Bitcoin (BTC) is an inflation hedge, right? That’s what a lot of crypto analysts say. So, theoretically, the bitcoin market would get a boost as Russia’s invasion of Ukraine sends crude oil to its highest price since 2008.
But it’s not that simple. High oil prices might give the Federal Reserve an extra reason to worry about inflation, and that might keep pressure on the U.S. central bank to tighten monetary policy from the current, ultra-loose conditions.
In recent months, bitcoin has been falling in response to hawkish announcements from the Fed – seemingly in sync with stocks.
A question some crypto analysts are starting to ask is if bitcoin might decouple from stocks and start to trade more like a safe haven asset, similar to gold – that is, an asset whose price might benefit or even just hold its value when stocks are selling off.
“I’m wondering if bitcoin is starting to show the first signs of maturity as a safe haven,” said Jason Deane, analyst at Quantum Economics. “If so, this could, theoretically, become a positive outcome for the asset.”
Bitcoin is having its best week so far in 2022; the cryptocurrency is up 12% since Feb. 27. The latest rally pushed bitcoin into the $40,000s after news of the invasion initially sent the price down to the $30,000s. As of press time, the bitcoin price was just under $43,000.