Bitcoin's relationship with Gold reached a record high at the peak of US-Iranian tensions earlier this year. As both assets increased in parallel with the gloomy geopolitical thinking, leading experts said the cryptocurrency behaves like a safe haven asset.
As for the second week of February, however, it shifts bitcoin bias to fit a risky narrative. The asset has moved in the opposite direction of the gold so far, the parties have almost queued the stock markets, and the Coronavirus outbreak acted as a leading indicator.
Looking back, stock markets have played up to the whims of Coronavirus updates all this month. Symptoms of alleviating fears led to growth in the stock market. Similarly, worrying reports about the outbreak have reversed earnings.
Gold, a perceived safe haven presence, almost reacted negatively to movements in the stock market. He encountered a yellow metal dip that improved the risky sensation. On the other hand, dismal equity conditions helped Gold increase or protect earnings and showed that investors behave as hedging assets.
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Macroeconomic correlations dropped bitcoin with the option to queue any of the assets: risky or risky. Only this week, he chose to follow the cryptocurrency risk, i.e. global capital shares.
Facilitating the Policies Behind Bitcoin's Pump
Renowned market analyst Mati Greenspan said in an interview with BlockTV. Bitcoin surpassed the safe harbor cloak when the Coronavirus outbreak launched its stock markets.
Quantum Economics founder found that incentive packages have turned into bitcoins to protect the market against virus fears by giving credit to central banks for pumping cryptocurrency. Excerpts from his descriptions:
“The People's Bank of China has already injected $ 170 billion into its economy. [Federal Reserve] recently continued to expand quantitatively, like the European Central Bank. "
This left stocks and bitcoin with the same bull catalyst: free money with a lower interest rate. However, it seems that even free money cannot protect risky markets, as China has reported a bounce in Coronavirus-related cases and warned analysts about the virus's long-term impact on the global market.
Seema Shah, chief global investor's chief strategist, said that market sentiment will eventually worsen. This will leave the central banks to take additional mitigation measures.
For Bitcoin, it's all about switching parties. If the central bank refuses to inject more liquidity into the system, investors can begin to perceive it as a safe haven again. As of now, the cryptocurrency remains a double asset.