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Gold Up 7%, Bitcoin Down 25%; Is Bitcoin Losing Its Shine As Safe Haven Asset?

Scorpio

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Gold Up 7%, Bitcoin Down 25%; Is Bitcoin Losing Its Shine As Safe Haven Asset?​

By Ambar Warrick
Published 2 hours ago Updated 1 hour ago


Bitcoin’s latest tumble, as the Russia-Ukraine conflict intensified, saw it diverge further from gold this year, raising more questions over the token’s viability as a safe haven.


Bitcoin prices slumped nearly 11% from Wednesday’s level, coming below a key $35,000 support level as Russia’s declaration of war against Ukraine rattled financial markets.
Safe haven: Gold or Bitcoin?
We found out today. pic.twitter.com/Z9smsr8pu6

— David Ingles (@DavidInglesTV) February 24, 2022

In contrast, gold jumped more than 2% as investors piled into the age-old safe haven.
The move highlights the growing rift between Bitcoin and the yellow metal this year. While gold prices have risen about 8%, the world’s largest cryptocurrency has shed nearly a third of its value, data from goldprice.org shows.
Bitcoin and gold YTD



The BTC-Gold rift has widened substantially

The decline has challenged earlier notions of Bitcoin being a viable gold alternative, considering its decentralized nature and general detachment from the broader financial space. These aspects of the currency were widely lauded during Bitcoin’s stellar rally last year, where it surged to nearly $70,000.
But while the rally was indeed steep, a large portion of it was backed by institutional interest in the token. The influx of big investment houses has seen Bitcoin behave more like conventional markets, specifically, stocks.
Losses in Bitcoin this year have mirrored those in the tech-heavy Nasdaq index, which is down about 22%.

Gold the preferred inflation hedge?​

Fears of rising inflation had also seen markets tout Bitcoin as a potential inflation hedge, ie, returns on the currency would be consistently above annual inflation rates.
But with the token trading down for the year, such a notion seems rendered moot. Gold on the other hand, is trading close to the level of annual inflation in the U.S.- which had surged by 7.5% in January. The reading had rattled crypto markets earlier in February, while supporting gold.
Bitcoin’s recent sensitivity to inflation also makes it averse to rising interest rates. A bulk of the token’s decline this year has been driven by hawkish signals from the Federal Reserve, which has planned a rate hike in March.
Traders have been quick to pick up this trend. Prominent gold bull Peter Schiff has repeatedly downplayed the Bitcoin-gold relation on Twitter.
Still, considering Bitcoin has moved in lockstep with stock markets this year, it is likely that a recovery in the sector will spill over to crypto.

 

Buck

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the metals begin to 'run' and there always seems to be the Plunge Protection Team that gets involved to crush that exuberance
 

engineear

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the metals begin to 'run' and there always seems to be the Plunge Protection Team that gets involved to crush that exuberance
It won't be long yeah yeah yeah
it won't be long yeah yeah yeah
it won't be long yeah yeah...till I belong to you

It won't be long....Beatles circa 1964
 

Juristic Person

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Bitcoin was never a "safe haven".

But it will emerge as a worthy risk after all is said and done.
 

Buck

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look at the way the markets moved today, huge opening drop and then miraculously it rebounds, no fed intervention there.
and right now it's all down...it's like riding the worlds largest roller coaster


with my latest peek at spot prices;
i was actually presuming the war was over
 

shinnosuke

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I gave up trying to guess which direction the price of any of my assets might go. Or perhaps my best guess is that it won't go the direction I hope for. The only exception is me wishing for lower silver prices so I can improperly store a bit more canoe ballast, and <splash> lost my silver again.
 

Buck

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The only exception is me wishing for lower silver prices so I can improperly store a bit more canoe ballast, and <splash> lost my silver again.
between that and wanting to have the ability to liquidate any silver, at a price nearing $50, i'm feeling a bit conflicted here


:summer:
 

Voodoo

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SOoooo much for that. War must be done already.
 

Voodoo

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the metals begin to 'run' and there always seems to be the Plunge Protection Team that gets involved to crush that exuberance

Crush the metals and they Sold a shit ton of puts on QQQ. ZH ran an article and showed what happened, though they thought it was people dumping hedges. Sure, on the day war starts everyone dumps their hedges.
 
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shinnosuke

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Articles/posts detailing the final, irredeemable, complete and total demise of BTC typically don't age well. Yet, even after several years, the buggy whip aficionados keep deriding the Model A as if it will go away. In my mind, mutual cooperation/admiration/sustainability is best as both sides deplore fiat.
 

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Gold hasn't been a safe haven asset since at least the time that GATA was formed.

If you go back to the start of Covid, gold is basically flat, maybe up a hundy, while the Fed Balance sheet has what, doubled? Bitcoin has held up nicely.

If one wanted to put down Bitcoin, probably the best argument would be that there is nothing to prevent the PTB from doing to Bitcoin what they did to gold via the futures markets.
 

gringott

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I think there is a forum out there called bitconismoney.
 

EO 11110

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i've seen this crypto show before -- the internet, social media, phone/text data are just a few available examples

1. it's totally anonymous and safe, do whatever you want - no issues mate

2. the forward thinkers and skeptics, aka conspiracy theorists, start finding info that runs counter to the anon narrative - issue warnings.

3. the backward thinkers dispute/fight the revelations in a failing attempt to defend their mistakes. clinging to hope

4. the slow burn to reality continues -- more and more info is discovered/revealed that completely debunks the assumption in #1 above
 
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solarion

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Bitcoin is being tied to volatility in the equity markets for the first time ever, so it's not moving as it should be. Bank seizures in Canada should have had bitcoin screaming higher, yet it doesn't seem to care all the sudden. This correlation will end, and when it does bitcoin will react violently upward...imo. Meanwhile avoid it like the plague.

We can test this theory easily, because bitcoin never stops trading, but the rigged equity markets do. Bitcoin is down 3.46% in the past 24h right now, while US equity futures are not yet trading. If this correlation holds up, then equity futures should open significantly lower.
 

EO 11110

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naz is down 300 or so. crypto has been roughly correlated with the naz high beta story stocks for a while, no?
 

solarion

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Yes it has, but that's only been a "thing" for months, not years, hard for me to say exactly when that began, as I haven't been trading anything crypto related in some while. Bitcoin down 3.65% now and right on cue equity futures are down, oil, gold, and silver are up. I guess we'll see if another "miraculous" reversal rally is in the cards. I personally doubt it, but market rigging is pervasive. For those paying attention it has been obvious for some while that equity strength has been met with strong selling pressure, particularly late in the afternoon. I think a lot of institutional investor know which way the wind is blowing.

1646005089021.png
 

anywoundedduck

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solarion

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Unless it can be hacked...
Given that US banks use precisely the same level of encryption, I think the threat of hacking is blown completely out of proportion. Someone with a few bitcoins in a cold wallet needn't lose sleep. Experienced bitcoiners scatter coins over multiple wallets for this very reason.

Meanwhile, your bank is one big centralized target.
 

Buck

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Given that US banks use precisely the same level of encryption, I think the threat of hacking is blown completely out of proportion. Someone with a few bitcoins in a cold wallet needn't lose sleep. Experienced bitcoiners scatter coins over multiple wallets for this very reason.

Meanwhile, your bank is one big centralized target.
that bank supposedly insures me up to $250k

that's 'money in the bank' when considering i don't keep more than $250 in my account at any one time...give or take

such a difference but think...if they were to put that $250k insurance package onto BC, people would be hacking it all the time

there would be claims and anxious FBI agents running all around: Where'd You Put Your Password...that would be funny
 

solarion

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Someone stole gold from a brinks truck...therefore gold is too risky an asset for wealth storage.
 

ds_mustang

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Bitcoin is starting to be captured by wall street, like gold was, via futures and other wall street products that reflect Bitcoin price but aren't Bitcoin. Bitcoin was easily captured and replaced by wall street as it's main use case is price speculation. There is no need for anyone to actually use bitcoin or have a wallet as wall street can give you "Bitcoin" price speculation a dozen ways with ease and regulatory compliance. All us long term gold guys could see that coming.

This might be the beginning of the end of Bitcoin, at least as the primary face of crypto. Luckily crypto is now much larger than Bitcoin. Smart contact crypto like Ethereum are very different from Bitcoin. By actually having an Ethereum wallet and using the network you can participate in NFT markets, income generating staking and DeFi protocols, lending, stablecoins, DEXs, anonymous business structures, etc. These are groundbreaking use cases (with more being created). Wall Street cannot easily capture and replicate them. In fact Wall Street is being replaced by them IMO.

So while Bitcoin becomes hamstrung by Wall Street games, smart contact crypto will continue innovating. People will continue moving into smart contact crypto because the financial and other opportunities that aren't available elsewhere. Eventually the public will catch on and Bitcoin will no longer be the crypto asset that drives pricing for the whole crypto sector. But until that happens, bitcoin's failings will hamper crypto values.
 
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EO 11110

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crypto is losing the buyers that were in it because of the (falsely) claimed privacy and security

perhaps that is why it has underperformed expectations in global upheaval.....as digital gold is badly lagging real gold in this first true test
 

solarion

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There's nothing fundamentally wrong with crypto privacy or security. There's something wrong with silly people that don't observe common sense guidance when using them. If they treated them like gold or FRNs they'd not be leaving them on exchanges to be looted by out of control gumbymint tyrants.
 

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My buck three eighty: The propaganda against bitcoin heated up in Canada. The true believers in BitCoin not bothered. The normies are frightened. Therefore the adoption of BitCoin is retarded. Also wasn't Ukraine a coin mining state due to cheap electricity? IDK.
 

solarion

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Don't know about the mining as I haven't kept up on it in years. As to the seizure of assets on exchanges, again, it's just dumb lazy people being fleeced, as dumb lazy people always are. The funds in bank accounts are far easier to steal for gumbymints, and if those crypto users had a lick of sense they'd have used throw away pay addresses and remained anonymous.

This, imo, will simply help people to recognize the risk of keeping assets where tyrannical gumbymints and their banking stooges can get at them and take greater precautions going forward. At this cryptos are 1000x superior to dollar denominated assets when it comes to electronic payment systems. Again, it's not about gold vs bitcoin/cryptos, it's about bank credit vs cryptos.
 

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There's nothing fundamentally wrong with crypto privacy or security. There's something wrong with silly people that don't observe common sense guidance when using them. If they treated them like gold or FRNs they'd not be leaving them on exchanges to be looted by out of control gumbymint tyrants.

People leave money in brokerages... crypto exchanges are pretty similar but don't have FDIC insurance, if that is actually worth anything.
 

solarion

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Exchanges are easy centralized locations for gumbymint crooks to target and apply their legitimized monopoly on the use of force. The whole point of cryptos is de-centralization, so the irony there shouldn't be missed. Only a fool leaves cryptos on exchanges at this point, but there are plenty of fools around.

Hell, look at all the people too stupid to recognize their government will eventually replace the contents of their retirement accounts with toxic treasury debt that's bleeding purchasing power continuously. People ask who the hell would buy a 10y bond yielding -12%?!? Well the answer is YOU, once your government passes a "law" to force you to do so.

These are painful lessons in how expensive it can be to ignore counterparty risk.
 

anywoundedduck

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It can’t be if you don’t store it in an online wallet or exchange.

Bitcoin doesn’t get hacked...wallets do.
So what did Trudeau do a couple weeks ago?
He seized crypto wallets, all over Canada. Anyone supporting the truckers.
Please stop the bullshit about the security of cryptos. Misinformation.
 

Ebie

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Someone stole gold from a brinks truck...therefore gold is too risky an asset for wealth storage.
Good post.
But a better analogy might be,
somebody took the real gold and filled a Brinks truck with fake gold bars.
But would that just make buyers more cautious, since it can be detected?
 

Scorpio

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that is some funny chit right there

silver and strong in the same sentence
 

solarion

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The longer Ag stays above that 200d ma the less abuse it's likely to take from the bankster HFT trading algos over at the crimex.

It'll be interesting to see how much of that 85xx delivery order the CME Group gets through by the time they post up their, no doubt, reliable numbers this evening. After close on Firday they'd only marked 10% or so as having been delivered. Perhaps we'll soon see just how robust this scammy fractional reserve physical market really is.

Most delivery months they're through huge chunks of the standing OI by the time delivery begins. Not getting excited yet, but they're definitely under a microscope with deliveries totaling a bit more than 50% of total registered stock.
 

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Someone stole gold from a brinks truck...therefore gold is too risky an asset for wealth storage.
Brinks trucks have insurance for theft. The gold owners pay part of that insurance when they pay Brinks to move the gold from point A to point B. Banks have deposit insurance; if a bank robber ransacks your local bank branch, you still will get your deposits. Our legal and business institutions have a lot of precedent in dealing with theft and spreading the risk of theft via insurance.

Crypto doesn't have that kind of insurance, nor the institutional support for such insurance. Yet. I bet eventually it will (at least some portion of the crypto sphere), and that is when crypto will start to be much more widely used.
 

solarion

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I can appreciate how much moral hazard comes from FDIC insurance, but it's literally just a smoke screen. If/when there's a legitimate need for it, yes, you'll get your dollars back in nominal terms(up to 250k), but you'll not be getting your purchasing power back. Additionally, while most somehow think all this safety/security/and convenience that bankster credit affords them free of charge, one need only appreciate the effects of an inflation rate that's likely 15% right this second. To say nothing of the fact that bank credit transaction companies charge a fee on every single transaction, which is hidden by retailers and absorbed by consumers.

If you've been storing your wealth in scammy banks that pay pathetic interest rates, while the dollar has been melting continuously for the past century+, then you've likely paid for the "privilege" of being repaid in melting fiat dollars should the banks again gamble themselves into insolvency(...and they will). Last I checked they'd only a few measly billions in the FDIC account and Amerikans have trillions on deposit in US banks.

The reality is that by convincing people they'll be "bailed out" when there's another massive banking crisis, it causes people to become apathetic about the risks associated with storing their wealth in a bank. A bank btw without any constraints on how much of their commercial banking business they can mingle with their investment(gambling) derivative casino funds...thanks to the dissolution of Glass-Steagall in 1999. A year, btw, which will likely match up perfectly with pinnacle of the Amerikan empire when viewed through the lens of history 100 years hence.
 

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Brinks trucks have insurance for theft. The gold owners pay part of that insurance when they pay Brinks to move the gold from point A to point B. Banks have deposit insurance; if a bank robber ransacks your local bank branch, you still will get your deposits. Our legal and business institutions have a lot of precedent in dealing with theft and spreading the risk of theft via insurance.

Crypto doesn't have that kind of insurance, nor the institutional support for such insurance. Yet. I bet eventually it will (at least some portion of the crypto sphere), and that is when crypto will start to be much more widely used.
Good post.
How about stocks that get diluted by "naked shorts".
How would even know if it was happening?
Or gold bars that are tungsten filled?
Are they cheeking for that?