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Bill Winters, chief executive officer of Standard Chartered, at the Asian Financial Forum 2020 in Hong Kong.Kyle Lam | Bloomberg | Getty Images

SINGAPORE — Hong Kong's position as global financial center remains "very, very safe" even as the city is caught up in escalating tensions between the U.S. and China, according to Standard Chartered's Chief Executive Bill Winters.

"The fact is Hong Kong is sitting here as the gateway to China for capital into China and out of China. That's only become more clear," Winters, who's attending the virtual Singapore Summit, told CNBC's "Street Signs Asia" on Wednesday.

Beijing earlier this year enacted a controversial national security law in Hong Kong, a Chinese territory with more freedom than mainland cities. The U.S. hit out at the move and sanctioned several individuals — including Hong Kong leader Carrie Lam — for undermining the city's autonomy.

Stanchart, a British bank that makes much of its profits in Asia, said in June that it believes the national security law "can help maintain the long term economic and social stability of Hong Kong." Three months in, Winters said that earlier hope for stability "seems to have been well founded and is playing out."  

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Bitcoin : Bitcoin a safe haven? UBS bank refutes


For UBS bank, Bitcoin and other cryptocurrencies can be interesting speculative investments. On the other hand, the banking group categorically refuses them the status of safe haven asset.

Bitcoin, a safe haven or not? Opinions differ. For MicroStrategy, this quality of cryptocurrency is undeniable. The publisher has just invested more than $ 400 million in cash.

On the other hand, UBS is more than skeptical in a study on this characteristic of safe haven lent to Bitcoin. By definition, an asset of this type maintains, or even increases, its value in times of economic crisis.

Bitcoin too volatile and risky for standard investors

In March, when the financial markets collapsed, Bitcoin and other cryptocurrencies also plunged. However, they quickly went up the slope, unlike for example shares listed on the stock exchange. But is it enough? No, UBS reply:

“Given their high volatility and the extent of past declines, cryptocurrencies can be attractive to speculative investors. However, they do not constitute an appropriate alternative to safe-haven assets, and do not necessarily contribute to the diversification of portfolios. “

Several financial indicators observed during the Covid-19 crisis would justify this analysis according to experts from the Swiss bank. In March, cryptocurrencies showed a positive correlation with traditional assets. This is explained by the liquidity needs of investors.

However, after this first phase, some correlations were reversed. And this trend casts “doubt on Bitcoin’s ability to serve as a safe haven” considers the UBS report consulted by Decrypt.

Bitcoin less obvious to diversify a portfolio

For bankers, four main reasons would therefore contradict this claim to safe haven status. And the main one is the sharp price fluctuations. These effectively exclude most investors because of too high a risk.

“Trading-oriented investors might find an interest in such price fluctuations, but our analysis shows that bad timing can lead to capital destruction,” UBS observes. The bank also believes that the cryptocurrency suffers from the lack of payment of dividends and coupons.

Finally, Bitcoin’s limited strengths in terms of diversification. Cryptocurrency can be seen as a way to improve the returns of an investment portfolio. It benefits from a low correlation with other asset classes. Or rather, she was taking advantage.

The report notes that “correlations have increased and returns have fallen”. In conclusion: “Bitcoin may now be less suitable as a portfolio diversifier”.

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