Is bitcoin losing its place as a hedge during economic downturns?

Often seen as a hedge against traditional markets, Bitcoin continues to be the subject of scrutiny and debate, especially as economic conditions continue to fluctuate.

In a recent discussion, Roundtable host Rob Nelson, Founder and Chairman of Gokhshtein Media David Gokhshtein, and Co-Founder of Market Rebellion Jon Najarian discussed the implications of Bitcoin in today’s financial world.

Nelson began the conversation by acknowledging bitcoin’s promise as an alternative investment, especially during times of economic uncertainty. However, he questioned how a recession could affect bitcoin’s price and wondered whether its long-term benefits would outweigh short-term volatility.

Gokhshtein agreed, saying bitcoin should be a part of every American’s financial portfolio. Despite his disdain for financial institutions, Gokhshtein acknowledged that companies like BlackRock and Fidelity could be successful in introducing bitcoin to everyday consumers, potentially filling the gaps left by bitcoin’s grassroots supporters.

Gokhshtein also turned his attention to the Federal Reserve’s recent actions, expressing frustration with its stance on interest rates and inflation. He argued that the Fed’s reluctance to cut interest rates has caused widespread market declines that have stifled both investors and consumers. In his view, a more aggressive rate cut could have instilled confidence and eased some of the financial distress felt around the world.

Nelson then highlighted a common sentiment among crypto enthusiasts: the belief that the launch of bitcoin ETFs, especially those backed by major financial institutions like BlackRock, could disrupt the market. Nelson questioned the validity of this argument, suggesting that broader access to bitcoin through ETFs could actually benefit rather than harm the market.

Najarian responded by rejecting the idea that ETFs are harming bitcoin. He noted that the lack of an approved bitcoin ETF in the past contributed to the problems seen on FTX, where market inefficiencies were exploited due to the lack of a simpler investment vehicle. Najarian argued that approving bitcoin ETFs could avoid these problems and provide a more stable and transparent alternative for investors.