Happy weekend, everyone! (despite the war news everywhere)
As you have probably heard, Israel performed a large-scale operation against Iran’s nuclear weapons program. Sound familiar? Yes, the same thing happened last summer: Israel strikes, Iran retaliates, and markets get shaken up.
Another thing that always pops up when something like this happens in the Middle East is the never-ending debate of whether Bitcoin could be a safe haven during the times of crisis or not.
This then escalates in a way that a familiar crypto character wakes up and brings gold to the table.
(Link to thread)
No matter how you feel about good old Peter Schiff, goldfinger and Bitcoin hater, you gotta admit, gold is a better safe haven than BTC when things heat up. I’d like to be wrong here, but this is how it is.
I’ve often noticed that people are kind of prisoners of their convictions. I know I have been, but why fight the markets? Why fight the charts if it’s clear that one asset holds up better than the other?
BTC Vs. GOLD
Here’s a little comparison on how BTC and gold performed when the news about Israeli airstrikes broke out.
Even though the Bitcoin price has recovered nicely since, the total drop during these three candles was 5.20%.
Meanwhile, gold gained 1.95%, and you can probably guess which one of these 4-hour candles was formed during the news about the strikes.
What If…
Probably just a coincidence in timing, but yesterday, some hours before the strikes, there was an announcement that Hyperliquid had added XAUt0, aka gold, to their spot list. It is now one of the first RWAs on Hyperliquid.
(Link to thread)
This got me thinking, whenever there’s IRL FUD or a global crisis, I just know that risk assets will plummet, and even though we can always swap our assets into stablecoins, an asset that would increase in value would be an even better option.
Before RWAs on blockchains, swapping into gold would have been quite inconvenient and would have required a tradfi account and some serious routing of assets, so stables were pretty much the only option since alts… well, if BTC doesn’t do well during a crisis, altcoins will be like lemmings on the verge of a cliff.
Now I can swap my entire spot balance to gold in seconds on Hyperliquid, but actually, why stop there? I wonder whether it would be possible to add even more RWAs in the future? Oil, for example.
Now, here’s another certainty: when things are about to blow up in the Middle East, the price of oil skyrockets.
Here’s how the oil price reacted to the news:
Compared to BTC (-5%) & gold (+2%), oil would not just have acted as a safe haven, but would have earned +12% gains as well.
Furthermore, notice how the price started moving up beforehand as the tensions were rising, as Israel announced they were ready to attack. This would have been a good time to start moving holdings into oil if that had been possible at the time.
Conclusion
I’m not taking any sides here, not siding with BTC maxis and most certainly not siding with Schiff. I just care about making money, portfolio management and risk management. Therefore, I wouldn’t mind at all crossing into tradfi assets during times of uncertainty and perhaps even making some gains while at it.
If Bitcoin should someday become a store of value even for the stormy days, I’d be more than happy to park my money there first.
Thank you for reading!
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