Bitcoin bulls were joyful on Tuesday as a senior analyst's call to buy gold in the Coronavirus-sourced market turmoil, creating similar opportunities for the cryptocurrency.
Goldman Sachs' commodity researcher Jeffrey Currie, said in a note The Federal Reserve said the yellow metal has reached a "twist point" after announcing that it will receive an infinite amount of mortgage-backed securities and Treasury bills to keep lending costs low.
He said that the decision of the US central bank would increase liquidity, which would prevent investors from pouring their gold positions into cash. He added that the growing deficit in emerging economies and financial instability in European countries will lead investors to seek gold security, a traditional haven asset. Excerpts:
“We believe this will likely lead to humiliation concerns similar to the post-GFC era. Accordingly, we are at a point where “fear” driven purchases will begin to dominate liquidity-driven sales pressure, as in November 2008. "
Bitcoin Eyes Price Boom
Only the gold forecast allowed crypto traders to create a similar scenario for their markets. Most importantly, billionaire hedge fund manager Mike Novogratz predicted that he could track the gold of bitcoin with a remarkable price reduction as both assets are scarce by nature.
Gold is almost back to the top. I believe it is much higher. Let's go $ BTC. Get on your horse and get on. The same thesis.
– Michael Novogratz @novogratz photos and videos on Instagram March 24, 2020
The parallel upside forecast came after the Fed's announcement Monday's both gold and bitcoin prices rose synchronously. As the yellow metal approached the $ 1,627.70 level, similar cryptocurrency also rose to $ 6.886.10. According to alias market analyst LightCrypto, both assets showed a positive correlation.
“The correlation shown by Bitcoin and gold after today's QEinfinity announcement is something to consider when it's still the first inning of what's ahead of us.” said with tweet It was released on Tuesday.
The near-term trend of assets was similar even during the downtrend. While traders have been liquidating their positions to meet margin calls, both have been in sync over the past two weeks. Profit situations in 2020 also emerged as opportunities for traders to evacuate local highs in cash, mainly because they entertained the idea of staying home during the Coronavirus crisis.
However, so far by 2020, bitcoin has decreased by 5.87 percent, but gold has increased by 5.42 percent.