While the pandemic continues to spread and the stock market continues to rise, grows, investors fear that a is about to collapse. This leads to the fact that some so-called “safe harbors” turn to Gold, and even Bitcoin.
A prominent economic adviser, notes that there are currently several “worrying signs” that plagues the market.
This has prompted him to warn investors about to buy shares “are amazingly disconnected from reality”. Yet, can Bitcoin, its role as a “Safe Heaven” to meet? Welcome to the facts-Check!
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All eyes are on Bitcoin and Gold
The ongoing pandemic has globally led to a catastrophic decline in employment and the Central banks have been forced to unleash your money printer in an unprecedented pace.
In particular, the Bitcoin investors as well as the “Gold Bugs” is watching this development very critically. In your opinion, this is even more of a reason why investors should be more emphasis on “Hard Assets”, which are underpinned by scarcity.
Gold has established itself over several decades as a safe haven, but if Bitcoin is able to be in a country’s macro-economic downward put trend to achieve a good Performance, could soon be on the test.
Mohamed El-Erian, former CEO of Pimco and chief economist at Allianz, recently stated in an opinion that there is on the stock market, some worrying signs, which he observed carefully.
He refers to rising companies, bankruptcies, households with mortgage and rent payments in arrears, and other factors as grim evidence of what could come next.
He advised the investors before assets move, the “are amazingly disconnected from reality,” values back. So he had to keep in mind:
Instead of assets buy – to-reviews, which are decoupled in a surprising way, of the underlying corporate and economic fundamentals, investors should think much more about the recovery value of their assets.
Bitcoin can establish itself as a safe haven in times of crisis?
Although the Bitcoin safe haven was not to his Status as the end of February and beginning of March, just, he has nevertheless a Chance, against the Background of continued to prove economic downward trends.
A recent report from Arcane Research, the two facilities have brought, though, Bitcoin is incredibly volatile as Gold, the investors in the past two years of similar returns. In the report it is stated:
It is considered a Two-year window, so Bitcoin has reached more or less the same return as Gold, but was significantly more volatile.
Source: Arcane Research
The quarterly report of Binance faced also Bitcoin and its Performance of the most important Assets, and showed that BTC could have in front of silver, and after Oil, the second-best return in the last 3 months.
Source: Binance Research
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And also in the recent commodity analysis from Bloomberg is predicted that both BTC as well as Gold in the year 2020 will achieve a better Performance than other raw materials.
The lack of correlation between Bitcoin and Gold is there cause for concern?
While the above statements suggest that both Gold and Bitcoin are scissors, a comb, and it is said that also the Bitcoin exchange rate of a reversal stock market will benefit, seems to be the latter to be questionable. At least if we look at the correlations of BTC.
Between the Gold and Bitcoin exchange rate, the monthly correlation of their maximum levels in March 2020, with 55.8% in the meantime -42,8% in may favor. The shows, in Essence, what it says is the annual correlation with a value of 0, and that in the long term, no correlation between the two Assets exists.
Source: skew
This in turn means that the Bitcoin exchange rate from other factors is moved, as the price of Gold. The following Chart shows.
In view of the fact that the growing fear of a renewed stock markets Crash is considered as the biggest drivers of the recent rise in Gold price, we clearly see that the Bitcoin exchange rate (in red in the Gold Chart) to the benefit of seems to be and continues to be stagnant.
Not to deny, and also the analysis of Bloomberg, is the increasing correlation of Bitcoin to the S&P 500. This connection we have also discussed recently in one of our articles.
The latter makes it unlikely that the Bitcoin price would benefit, at least in the short term, a stock market Crash. He can, however, in the medium term this is expected due to its strong Fundamentals to.
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