In his article, the foreign exchange veteran noted a lack of buying interest towards Gold among traders during the recent Chinese stock market crash. It was unusual for a commodity whose price used to rocket during these economical meltdowns. However, at the same time, another commodity was found breaking the tropospheres.
Bitcoin, whose value started to surge the same day when the Shanghai Composite Index’s collapse began, was reportedly stealing the gold’s thunder. By the time the Chinese market stabilized — after one month — Bitcoin was also stabilized, after rising around 30% in value. The gold’s value, during this time, was crawling sideways, with head toward bears.
A part of the surge in Bitcoin’s value was also credited to the Greece debt crisis. However, the reports were mostly speculative, for the BTC/EUR trade never showed any increased trading activities, and the Greeks themselves had no means to purchase the digital currency amid a well placed capital control.
“We can see that a) In the past gold has soared in times of financial crisis; b) Confidence in both the Euro and Chinese stocks fell at the same time in June; c) at the same time the price of gold was falling; and d) at that time the price of Bitcoin was increasing,” Tiller stated. “Logically, all of that suggests that Bitcoin has replaced gold as the safe haven of choice in times of trouble.”
In one of our articles from the last month, we had speculated that the surge in Bitcoin value was more noise than music. The pump in the value could have been induced psychologically, thanks to a great digital currency community that presents Bitcoin as the utmost solution to anything that seems unfair in the traditional finance infrastructure. Martin Tillier somewhat said the same, stating that correlation doesn’t always yield causation. Excerpt:
“It seems to me that while the case for Bitcoin as a safe haven isn’t proven, there is enough evidence to make owning some as insurance against the inevitability of another recession a smart move.”
Its a smart opinion!
Bitcoin, whose value started to surge the […]