In today's digital era, Bitcoin, as a virtual currency, has attracted much attention. Some people think that Bitcoin is just a safe haven for the French currency, while others think that Bitcoin can only deal with special crises. What role does Bitcoin play in the French monetary system? Does it really only work in exceptional crises? Let’s delve deeper into this topic.

As an encrypted digital currency, Bitcoin is unique in its decentralization, anonymity, and non-tamperability. This makes Bitcoin a form of currency independent of the traditional financial system. To some extent, Bitcoin can be seen as a safe haven for the French currency, especially when the French currency faces risks such as depreciation and inflation. For example, when the French currency faces instability, some investors will move funds into cryptocurrencies such as Bitcoin to avoid risks. This behavior is similar to looking for a safe haven when a storm approaches, and Bitcoin has become such a safe haven.

However, Bitcoin is much more than a simple safe haven. Bitcoin can also play an important role in special crises. For example, when the French monetary system suffers a hacker attack, political unrest, or financial crisis, the traditional financial system may be paralyzed, and Bitcoin, as a decentralized digital currency, can provide an alternative in this situation plan. The decentralized nature of Bitcoin prevents it from being controlled by a single entity, so when the traditional financial system is paralyzed, Bitcoin can continue to operate, providing people with a means of payment and value storage.

In addition, the anonymity of Bitcoin also gives it a unique advantage in special crises. In some cases of political unrest or heightened financial regulation, people may face the risk of assets being frozen or regulated, and the anonymity of Bitcoin can help people protect the security of their assets. Therefore, Bitcoin is not only a safe haven for French currency, but also a financial instrument that can flexibly respond to special crises.

However, despite its important role in the French monetary system, Bitcoin also faces some challenges and controversies. The price of Bitcoin is highly volatile and highly speculative, which makes some people cautious about it. In addition, Bitcoin’s decentralization and anonymity have also facilitated some illegal activities, which has triggered concerns among regulatory authorities. Therefore, although Bitcoin can work in certain situations, it also needs to face regulatory, security and other challenges.

To sum up, Bitcoin, as a virtual currency, is both a safe haven and a special crisis responder in the French monetary system. Its decentralization, anonymity and other characteristics give it unique value, allowing it to play an important role in specific situations. However, Bitcoin also faces challenges and controversies, and needs to be continuously improved and adjusted during the development process. Ultimately, the status and role of Bitcoin remain to be tested by time. We also look forward to seeing Bitcoin better integrated into the financial system in future development, bringing more convenience and possibilities to people.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

In 2019, many people considered Bitcoin a "safe haven asset." However, in 2020, this "safe haven" has failed in its duty. Earlier this month, Bitcoin prices nearly halved in a week as the global economy was thrown into turmoil by the coronavirus outbreak. Traditional markets are also full of victims.

Having said that, Bitcoin should not be considered a safe haven asset during any form of economic turmoil, 2020
The performance in 2016 further proves that it is not a safe haven. On the contrary, Bitcoin as a hedging tool can only be used to deal with a special kind of crisis, that is, the potential collapse of the fiat currency system.

Whether it is a war or a fiscal deficit, when responding to a crisis, the government will choose high inflation to respond to expenditures on emergency projects. The side effect of this decision is that it will dilute the money supply and reduce the value of people's deposits. Simple theory of supply and demand tells us that when supply increases and demand remains constant, prices will fall.

That concern has taken on new meaning now that members of Congress have proposed that the Treasury mint $1 trillion in coins and sell them to the Federal Reserve. As a side note, the Fed has made it clear that they have the ability to create unlimited cash flow to deal with the COVID-19 crisis.

Of course, Bitcoin does not need to worry about this problem: it does not have a central agency to issue additional currency and cause the existing circulation to depreciate, so it has a somewhat protective effect against the above-mentioned crises.

What is the situation facing Bitcoin?

One of the main arguments for Bitcoin is that government spending in the United States and elsewhere is out of control, ultimately causing the dollar and other fiat currencies to fall in value.

Brendan Bernstein of Tetras Capital at the 2019
At the Bitcoin Conference, he gave a speech on the macro environment of Bitcoin. He said that the U.S. dollar, the world's most popular legal currency, will eventually expand its supply rapidly due to the rise of socialist ideology, negative interest rates, and fiscal deficit expenditures, and there will be a substantial increase in supply. depreciation.

"Quantitative easing is a crisis for the currency and we are about to go backwards," Bernstein explained.

Dan McCardle, co-founder of Messari, also explained why Bitcoin behaved the way it did during the COVID-19 epidemic in a tweet in June 2018.

Billionaire investor Ray Dalio
He also shared his belief that the nightmare scenario shared by Bitcoin bulls might come true, although he did not believe at the time that the cryptocurrency would become a safe-haven asset for most investors.

But in the context of COVID-19, the story is a different story. Cash is king now, and only fiat currency can be used to pay for rent, food and other daily necessities. From the perspective of short-term price stability and purchasing supplies, Bitcoin is still unable to compete with the US dollar.

The recent market performance is just an expected collapse in economic activity, not the end of fiat currencies.

However, it is very likely that the global pandemic will continue the pattern Bernstein described in 2019.
The trend mentioned at the Bitcoin Conference is that the government will advance a lot of money that they do not have, which will eventually lead to the devaluation of the US dollar and other legal currencies. The only question here is how much impact the pandemic will have on the existing fiscal deficit. But in any case, it will not affect Bitcoin’s monetary policy.

In short, Bitcoin (and gold) are only a hedge option for the global fiat currency system, not a safe haven from various economic crises. Despite the recent collapse in Bitcoin prices, it largely functions as digital gold because it is immune to potential political factors in terms of issuance rates and personal control. This is also an important value proposition of Bitcoin and its network.

It is worth noting that one of the world’s top foundations proposed that 26
Bitcoin prices have recovered within hours of trillions of dollars in stimulus spending being launched to help people survive the current economic turmoil caused by the coronavirus. However, correlation is not sufficient to demonstrate causation.

Still, the recent economic crisis isn’t Bitcoin’s true test. If governments do print massive amounts of cash to deal with COVID-19 and life in the next 10 years, then we may see the true test of Bitcoin’s role as a safe haven asset.