An investment that is expected to hold its value, even when other markets are losing value. In crypto, safe havens are typically known as stable coins such as tether and USDC
Example Sentence : When bitcoin reaches an all time high price, it is a good idea to put some of your profits into a safe haven such as USD Coin to protect your investments.
by cfaulk 2020-12-15 14:23:07

Also Known By:

Stable Coin

Understanding Safe Havens

A safe haven investment diversifies an investor’s portfolio and is beneficial in times of market volatility. Most times, when the market rises or falls, it is for a short period of time. However, there are times, such as during an economic recession, when the downturn of the market is prolonged. When the market is in turmoil, the market value of most investments falls steeply.

While such systemic events in the market are unavoidable, some investors look to buy safe haven assets that are uncorrelated or negatively correlated to the general market during times of distress. While most assets are falling in value, safe havens either retain or increase in value.

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