A safe-haven asset is a financial instrument that is expected to hold or even increase in value during economic downturns. Because these assets are uncorrelated or negatively correlated with the overall economy, they may appreciate in the event of a market crash.
Certain characteristics that assets frequently have that contribute to their reputation as a safe haven include:
Liquidity: At any time, the asset must be easily convertible to cash.
Functionality: the asset must have use that will provide long-term demand.
Limited supply: supply growth should never exceed demand.
Demand certainty: the asset is unlikely to be replaced or become obsolete.
Permanence means that the asset should not deteriorate or rot over time.

Safe-haven assets are investments that retain or increase in value during market turbulence. Investors flock to these assets during economic downturns, geopolitical tensions, or financial crises due to their perceived stability and low risk. Common examples include gold, U.S. Treasury bonds, and certain currencies like the Swiss franc and the Japanese yen. Gold is traditionally favored for its intrinsic value and limited supply. U.S. Treasury bonds are backed by the U.S. government, making them highly secure. Safe-haven currencies benefit from the economic stability and strong financial systems of their issuing countries. These assets help investors preserve capital and mitigate losses when other investments falter, providing a hedge against market volatility.