Bitcoin price in recent days has started a long-overdue correction following a powerful multi-month, parabolic rally that took the price of the crypto asset from a trading range between $3,000 and $4,000, to local highs of over $9,000.
But as the cryptocurrency dubbed as digital gold’s bullish momentum begins to fade, the price of Gold has begun to climb closer to reaching multi-year highs in the face of mounting fears over an impending global economic storm on the horizon.
Bitcoin Price Drops Just as Gold Bull Breakout Begins
In recent weeks, Gold’s reign as the preferred hedge asset during economic downswings was given its first real run for its money. As concerns grow surrounding the continued trade war between the USA and China, and the effect the two superpowers might have on the greater global economy.
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As investors in the stock market and other traditional markets seek to de-risk and protect capital from the potential crash many financial analysts are predicting, safe-haven assets such as Gold are typically increasingly held as a hedge.
As major central bank balance sheets started diminishing, volatility started increasing. Central banks continue to have significant impact on financial markets. #gold #bitcoin pic.twitter.com/r4mp4qkftG
— Gabor Gurbacs (@gaborgurbacs) June 5, 2019
However, a recent “#DropGold” television marketing campaign from Grayscale Investments and a corresponding parabolic surge in Bitcoin price following a bear market was set to challenge gold’s historic use as a hedge.
That’s all changed this week, as Bitcoin price has finally begun to correct after a break of the parabolic rally that signaled the end of the bear market. At the same time, Gold, the safe-haven asset that investors look to to protect capital, has finally started to grow in value once again.
Gold is skyrocketing today!!
Now not far from its multi-year highs.
For reference. The purple circle is when the #dropgold campain went live. pic.twitter.com/Hs87TF6rLD
— Mati (@MatiGreenspan) June 5, 2019
According to eToro analyst Mati Greenspan, Gold is “skyrocketing” and close to reaching “multi-year highs.” Meanwhile, Bitcoin, has struggled to maintain its price at $8,000 after being rejected at $9,000, and is currently trading at $7,600.
Investors Urged to #DropGold for BTC, But is the Opposite Happening?
With Gold picking up momentum while Bitcoin’s wanes, the effectiveness of Grayscale’s marketing efforts must be called into question.
Investors aren’t dropping Gold, as the campaign suggests. In fact, the opposite may be happening as crypto investors have increasingly become exposed to Gold as an opportunity for portfolio diversification.
Even prominent crypto influencers on Twitter have begun talking about the precious metal amidst normal cryptocurrency market analysis and discussion.
This is one of the most beautiful charts out there.
Shorting this is like shorting $BTC at $4000 or longing it at $6000 back in the day.
Can't recommend, even though it's at resistance.
Test a level too many times and it's bound to break. pic.twitter.com/rCb3c4QF3D— DonAlt (@CryptoDonAlt) June 4, 2019
Worst yet, businesses offering investors of precious metals exposure to cryptocurrencies have begun to pull back on that offering, further suggesting that Gold investors simply aren’t interested in Bitcoin, while Bitcoin investors may very well be interested in the Digital Gold’s physical counterpart.
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The two assets rightfully draw many comparisons – they both have a finite supply that’s mined, and can be used as both a means of exchange and store of value. Oftentimes, the comparison sparks debate as to if Bitcoin could potentially flip the market cap of Gold, which would take the price of Bitcoin to over $350,000 per BTC.