Is Bitcoin Digital Gold? World Market Downturn Indicated Otherwise, or Did It?
Bitcoin and gold were touted as being safe-haven assets as world markets sold off. Today's market selloff left the DJIA off almost 3% with a large 700-point selloff. During this market selloff of the last week, gold has continued to do well and has extended its gain while Bitcoin has slumped below its resistance level of $10,500. Were analysts wrong about Bitcoin joining gold as a safe-haven asset, or are other forces at play?
Bitcoin sold off 4% as world markets fell. The German market was particularly rocked during Wednesday's fall, and indicators of a global recession are flashing red. The yield curve has inverted, and this time, the media took notice. The cryptocurrency market was not spared the bloodshed in the market.
Gold performed as expected during fears of a recession. As markets fell around the world, it appreciated 1%, and has been on a tare since the downturn began. The US Federal Reserve declared it would cut its target rate earlier this month, and that led to a bullish uptrend in the gold market. Gold has broken the technical and psychological $1,500 barrier, and the media is screaming about a global recession.
It's too early to tell if Bitcoin will be a safe-haven asset. A lot of the hurt Bitcoin has experienced is due to the IRS crackdown on the cryptocurrency asset. The IRS recently sent Bitcoin traders warning letters, and the SEC has expressed interest in creating nodes for most major cryptocurrencies. Bitcoin is a risk-asset, and to a certain extent, so is gold. My belief is that since Bitcoin has never seen a major market event, it is too early to consider it a safe-haven asset. Gold has thousands of years as money and a safe-haven, and we shall see how Bitcoin reacts to the coming global recession.
Originally published in my Publish0x account I own at:
Also published in my Hyperspace, Minds, Weku, Serey, Golos, Bearshares and Whaleshares accounts I own.
Picture from Pixabay.