Despite heightened uncertainty in the global markets, Bitcoin is moving higher than gold.
As a matter of fact, the world’s most valuable cryptocurrency is presently trading at $11,700, representing 16 percent gains on a month-to-date basis to beat gold, the traditionally well known secured asset which added 6 percent this month.
With the U.S. President Trump’s decision to escalate trade tensions with China, this triggered a flight to safety kind of thought, making the precious metal to pick up a bid at $1,400 on 1st Aug. While S&P 500, a global benchmark for riskier assets, fell 0.90 percent on the same day.
The risk aversion worsened Earlier this week the risk aversion became worse when the Yuan began to depreciate beyond the major psychological level of 7 per U.S. Dollar caused by China.
Ultimately, the effect now made the S&P 500 fell to a two-month low of $2,822 on Monday while gold moved up gains to hit a fresh 2019 high of $1,510 yesterday.
On a good not, Bitcoin also found takers near $9,900 on Aug. 1 and rose to a one-month high of $12,325 on Tuesday.
VIX rose 10 percent on Aug. 1 and rose to a seven-month high of 24.81 on Monday. Currently, the uncertainty is seen at 17.75.
Interestingly, Bitcoin jumped from $9,900 to $12,325 in six days to Aug. 6. Though the rally seems to have been jammed with the VIX index pulling back from seven-month highs.
If recent price action is anything to go by then Bitcoin probably must be enjoying it’s boost.
According to a prominent analyst Mati Greenspan, there is no long-run correlation between bitcoin, stocks and the US Dollar anyway, as he noted that gold and bitcoin have moved in opposite directions in the past.
Take for instance, the recent occurrences in Bitcoin as it went below the long-held support of $6,000 on Nov, 14, reviving the bear market which had come to a halt near that psychological support in five months to October. By mid-December, BTC was changing hands at 15-month lows near $3,100.
Despite the trade tensions between the US and China, bitcoin had remained in a bear market throughout 2018 as the same time frane saw gold moving from $1,200 to $1, 300 and went further to extend the rally in feb. 20 high with $1,346.
As we watch the scenario, yet so early to say bitcoin has taken up the role of a safe haven asset for now.
Credits: Steve Moore, Omkar GodboleJOIN OUR COMMUNITY