Bitcoin has plunged through key levels of support today dragging the entire crypto market down with it as usual. Gold conversely continues to rise, is BTC still a safe haven?
Crypto markets have dumped over $15 billion in the past 24 hours as the correction accelerates. The move lower was largely expected after such an extended period of good gains and there is no need for panic or FUD just yet.
Total market cap is back down at $260 billion which is 10% lower than it was at the beginning of the week. Volatility is still a huge aspect of crypto asset markets.
Bitcoin Sheds 5%
Bitcoin has collapsed through key support levels at $9,300 today as it bottomed out at $9,100 during early hours trading in Asia.
The move has accelerated losses which began almost a fortnight ago and have so far resulted in a 13% pullback which is nothing unusual for BTC.
It is currently holding on to this support level with the lower one around $8,800. Below that there is nothing stopping a dump down to $8,300 where more solid support lies. A move to the upside is looking very unlikely at the moment.
Gold Still Bullish
According to the charts the precious yellow metal hit a new seven year high this week of $1,670/oz marking an overall rise of 10% this year which is impressive for a non-volatile asset.
With bitcoin’s decline some have begun to question its status as ‘digital gold’ as it decouples from the asset.
In yesterday's market termoil, we found that Bitcoin is still not "Digital Gold"
… yet. pic.twitter.com/Ww2ABhBLCP
— Charles Edwards (@caprioleio) February 25, 2020
Naturally serial bitcoin basher and goldbug Peter Schiff couldn’t resist sticking his oar in despite BTC outperforming gold this year by 16%. It should be noted that these tweets generally appear to be posted solely to troll the crypto community.
“It should be clear to Bitcoin bugs and CNBC anchors that Bitcoin is digital risk, not digital gold.”
Over the past 5 trading days the Dow Jones is down 7.3%, the NASDQ is down 7.9%, and The Grayscale Bitcoin Trust is down 22%. In contrast GLD, which tracks #gold rose by 1.6%. It should be clear to #Bitcoin bugs and @CNBC anchors that Bitcoin is digital risk, not digital gold.
— Peter Schiff (@PeterSchiff) February 25, 2020
Granted gold has maintained gains in recent weeks and continues to build on bullish momentum. However, there is no denying that both stocks and digital assets have blitzed it in terms of performance this year, even with recent losses included.
Bitcoin is still highly speculative so it stands to reason that prices will slump and volatility remains high when the world is in complete chaos. With entire cities being locked down fewer people are going to be thinking about trading digital assets, and it has a fraction of the market cap that gold has anyway.
Gold has always been a favorite for institutional investors who generally prefer more stability in their trades. This does not mean that BTC is no longer a safe haven, but only that it has yet to gain the momentum of more established assets when markets are in utter turmoil.
Has BTC lost its digital gold status? Add your comments below.
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