Is Bitcoin a Good Safe Haven in Times of War?
When shit hits the fan and bombs start falling on your head, what's the best way to protect your money and escape the madness?
Just when we got all lazy and comfortable, forgetting the possibility of there being a serious war in the western world, Ukraine “happened” and put us back into our place. The old saying “anything that can happen, can happen at any time”, reared its ugly head once again, reminding us of the infinite flimsiness of the nature of reality.
It’s interesting how everything can change in but a moment's time. Spoiled by decades upon decades of general peace and prosperity, this was quite a wake up call. Especially since the powers that be stopped talking to each other and started measuring their dicks in public, threatening all sorts of atomized mutually assured destruction, with mindless crowds of internet dwellers cheering them on. We have learned nothing, I suppose.
It made sense when the average people of the developed parts of the world (normies) shrugged the role of Bitcoin as an inflation hedge or a decentralized international form of value transfer. Their local currencies worked just fine and for the rest, there was always “Mastercard” (remember that commercial?).
And now we find ourselves, in the 21st. century, having to discuss energy rationing, conventional war strategies and safe havens from invading forces rolling in on tanks. Not to mention finding ourselves amid threats of nuclear weapons and total annihilation, not seen since the end of the cold war. Oh how far we have fallen. One is quickly reminded of the whole “Good people create good times, good times create weak people, weak people create bad times, bad times create good people.” philosophy. Well, that brings us to today’s topic.
What is the best way to store your wealth in a time of war and what’s the safest and easiest way to transport said wealth when running for your life?
As grim as these questions may seem, there is a place and a time for such deliberations. Three proverbial minutes to total obliteration amongst the mushroom clouds seems like as good a time as any, don’t you think? Even though we like to play with probabilities and risk reward scenarios here, we’ll leave this one to the will of the Gods and Fortune.
Allow me reiterate, I’m not saying that you or I will need to run from lethal conflict with only what we can carry on our backs any time soon, but for 43 million people who live just a day’s ride away from my home, that does seem to be the reality these days. If it can happen to them, it can happen to you and me.
So, let’s cover the basics. We’re talking about the worst case scenario here, not some half ass paper conflict, where your borders get reassigned and nothing really changes for you, trade war or some cold war psyops either. We’re talking about bombs falling on your head and frantically trying to get yourself and your family out of harm's way to safety.
Best case scenario, you’ll be running ahead of the real danger, before everyone else gets the same idea. In this case, as long as you have liquid wealth and quick access to it, you should be fine. Cash, gold, even stocks are gonna do just fine. Get your ass on a plane or however you wish to travel and get the hell out of dodge. You’re one of the lucky ones.
The only real danger at this point is for you to lose access to your bank account and any tied up illiquid investments, like real estate for example. Just that, no biggie, right? Well, that will depend on your situation, but let’s just say that all of that will do you no good, where you’re going, for a long time. You only have access to what you can liquidate in a moment's notice and what you have hidden at home.
If you’re really early, you shouldn’t even have problems moving your money out of your bank. If however you took your sweet time and missed that boat, well now you’re in trouble. That money is gone. At least for the time being.
The banks are closed and the country has frozen all your assets for the purpose of fighting its war. How many of us hold a significant amount of cash at home (under a pillow so to speak)?
Not many I would think, especially not in a foreign currency. We used to, along with provisions, back when we were still more accustomed to “hard times” or at least the memory was still fresh in our minds, but not any more.
And how long could you live in a foreign country from the money you have in cash, on hand, if you had to as a refugee? Or from the food in your home in case everything goes belly up? My guess is, not long. How can you be sure that your local currency would even be worth anything somewhere else, when engulfed in war? Something to think about, I guess.
So, now we understand that all our investments into real estates and anything banking related will be difficult to transmute into cold hard cash, the one thing we need in a time like this. Kiss them goodbye and hope the conflict leaves them intact and you’ll one day be reunited with them. I’m rooting for you.
Let’s take it one step further. What if you’re really late to the party and the shit has hit the fan already? There is fighting on the streets, soldiers everywhere, military checkpoints at every corner.
Do you really believe you’ll be able to carry physical valuables with you and get away with it?
How did that work out in the past for fugitives and refugees?
Did the military not confiscate everything that wasn’t sewn onto people’s skin?
Didn’t they end up even pulling out golden teeth, before letting people get across the border?
How much jewelry and cash do you think you would be able to carry with you all the way to your destination?
Not much, would be my estimate. You can only shove so much in your anus, before you start ringing off metal detectors and end up on the wrong end of a sloppy cavity search!
And then there are the crazed crowds, marauders, thieves, murderers and who knows what else will be preying on you on this trip of yours. War brings out the worst in people and so does extreme scarcity. Both are going to be prevalent conditions at a time like this. You’ll be lucky to get away with your life, but I wouldn’t count on bringing much in terms of physical possessions with you. Not for long, anyway. If it’s in any way visible or detectable, you’ll be fighting to protect it, every step of the way. Good luck holding on to gold, silver, jewelry, cash or anything else that can be taken from you at gunpoint. “You want your kids to live? Empty your pockets and I had better not catch you holding out on me or else…” sort of situation.
We’ve now proven that gold, silver, cash, investments and bank accounts are not the best safe haven asset in a time of war, when on the run for your life. Of course you’ll have some of that available and you might even find a way to keep parts of it for the duration of this perilous path, but there is no way in hell, you’ll be able to safely transport larger quantities of value with you!
Even if you are a wealthy individual, unless you’ve thought ahead and diversified your wealth amongst different banks, currencies, countries and investments around the globe, you’ll be hard pressed to take anything of significant value with you, when you’re running from invading forces. If you are a wealthy, internationally connected individual, you’ll be fine anyway. I’m not really worried about you. It’s the everyday citizen, even the ones who are well off, but not “offshore money laundering well off”, who might have to give the things we’re discussing here some thought.
So where does Bitcoin come into play? The magic internet money of the 21st century.
Well, it’s the perfect vehicle for our scenario, combined with some cash on hand for the immediate expenses that arise on the path.
It’s invisible.
Nobody would know if someone has millions of dollars in Bitcoin when running for their lives. Unless he were to brag about it, that secret is safe with him. If they don’t know you have money, they can’t take it away from you.
It’s internationally, universally usable and transmutable.
You can find ways of using Bitcoin in more or less every reasonably developed country in the world. ATM’s, shops, exchanges, OTC desks or simply by exchanging them for local currency directly with other citizens of the world. It is a true international currency of the internet.
Just because you don’t use it in your day to day life, doesn’t mean it can’t be done. These days it’s completely doable to get by just using Bitcoin and never touching a bank account again. Not easy perhaps, but doable, and getting easier every day.
It’s stored as information.
You can carry that information with you in your head, if you have to. All you need is your wallet's backup phrases and a password. Alternatively you could just memorize access to some third party custodian, preferably international and ideally decentralized, as we have seen the exchanges and wallets caving to political pressure in the recent past.
Memorize a few words and you can carry billions with you wherever you go, without the fear of getting robbed or it being confiscated. Nobody can prevent you from accessing your money, as long as you have access to the internet. Once you settle down in your target destination, for example. That my friend, is truly priceless!
It’s a liquid market.
You can exchange your Bitcoin on any Cryptocurrency exchange or OTC desk at any moment, even if we’re talking in millions. You can also use it to buy stuff directly. More and more ways are being opened every day. With a bit of effort, there are hardly any limitations in terms of quantity.
It is non-confiscatable.
You’re the only one with information and access to your money stored in Bitcoin. No one can take that away from you, if you do it right. Self custody is the way to go here. As long as you depend on a third party for access to your funds, you’re exposed to danger.
By the way, transporting your Bitcoin on your smartphone wallet, USB or any other physical device is no better than carrying a brick of gold in your backpack. If it can be taken from you, it will be!
But it is volatile!?
Yes, it’s volatile, but so is your house when under fire from the invading artillery! Besides, there are ways of mitigating those risks of volatility if that is your primary concern. When running for your life, I’m not sure that it even makes the list of concerns and dangers, to be honest. Besides, how well do you think your local currency will retain value, once your country is at war?
You can’t eat Bitcoin if you’re hungry!?
True, but you can’t eat paper or gold either, they’re all just a means to an end. The end here being buying food that you can eat. In a pinch, cash in local currency or gold are still the best options, of course. If you can hold on to them, that is. And for smaller amounts. Unless you happen to be commanding an army that is able to protect and carry your cash or gold for you.
They (invading army, government?) can take out the internet and you can just forget about your Bitcoin then!?
Sure they can and they most lightly will. But that only means you can’t access your Bitcoin at that moment in time, it does not however mean that it has disappeared, that anything is lost. As long as there is one computer somewhere in the world that has a Bitcoin node stored with all the data, your Bitcoin is safe.
There are some alternate ways of transferring Bitcoin, without the use of the internet, but are for the moment more or less limited to experiments (radio waves, satellite connection…). In a time of worldwide crisis, I’m sure we’ll figure out how to exchange Bitcoins without using the internet, if the need arises. But let’s be honest here, if the whole world loses access to the internet permanently, losing Bitcoin will be the last thing on your mind. Worry about your organs and your life! If that happens you FIAT money will become worthless over night. Haven’t you seen any dystopian aftermath movies? Bottle caps, bullets and sexual services, those are the value mediums in a world enveloped in burning chaos.
So, in conclusion, you should always have
some cash on you for the immediate expenses,
Gold for when cash doesn’t work and
Bitcoin for holding larger quantities of value.
Absolutely set things up so that you have sole custody of your Bitcoin and memorize, systematize access.
There are no perfect solutions in a time of war and escaping with your life and the lives of your loved ones should be your number one concern. No amount of money will do you any good if you end up dead or alone.
It doesn’t hurt however to have a backup plan and some money stored in a way that enables you sovereignty, liquidity and safe transportation in a time of crisis. I hope none of us ever need it, but if we do, I hope we’ll be as prepared as we can.
Disclaimer: nothing here is financial advice, just a fellow trader meditating on his trading journey, sharing the lessons he learned and debating some personal opinions that are only that, opinions and nothing more.
This newsletter is supported by you, dear readers, no one else.
I invest a lot of time and effort into writing this content and I do not get paid for my work. If you enjoy reading this newsletter and would like to support my work you may do so in one of the following ways:
- Share this content.
- Become a free or paid subscriber of the Newsletter.
- Become my Patron (tip jar)
- Buy me a cup of coffee with Bitcoin.
Bitcoin wallet: bc1qc60qsgtwzhgv3nnxvx6jlsuxh2zh55x3s4fv7w
