Bitcoin launched toward $9,000 on Monday, as the spread of coronavirus forced investors to cut ties to riskier assets like stocks.
While bitcoin is still considered a risky investment, it’s once again behaving like gold, according to Bloomberg. Fears of a global coronavirus pandemic appear to have revived the narrative of bitcoin being digital gold.
The bitcoin price rallied all the way to $8,983.93 on Monday for a gain of 4.6%. The largest cryptocurrency by market cap was last seen hovering north of $8,917, according to Bitstamp data.
At current values, bitcoin’s market capitalization stands at just over $162.3 billion, giving it a 65.8% share of the overall market. Trade volumes on the ten largest verified exchanges was $879.1 million, according to Bitwise.
Bitcoin wasn’t the only digital asset to rally on Monday. Altcoins including bitcoin cash, bitcoin SV, EOS and Cardano rose by at least 7%. With the exception of Tezos, every coin in the top 40 reported gains.
The combined value of all cryptocurrencies now stands at $246.7 billion, the highest since Jan. 18.
Bitcoin’s rapid advance came on a day where investors dumped stocks in favor of gold, U.S. Treasurys and other risk-off assets.
The price of gold rose by as much as 1.1% to $1,594.70 a troy ounce on the Comex division of the New York Mercantile Exchange. The yellow metal appears poised to re-take the $1,600 handle for only the second time in seven years.
For the first time this year, bitcoin’s 60-day correlation to gold flipped positive on Monday, according to Bloomberg. Basically, this means bitcoin and gold are trading in the lockstep with each other.
Bitcoin’s most ardent supporters claim their favorite cryptocurrency is a form of ‘digital gold’ that enables the preservation of wealth in the face of economic risks like recession and hyper-inflation. Bitcoin is considered a good store of value, but evidence for it being digital gold has been hit and miss. Monday’s Bloomberg report suggests that may be changing as bitcoin and gold show stronger correlation.
The flight to safety comes amid fears of a global pandemic resulting from the spread of coronavirus from China’s Hubei province. The virus has claimed the lives of 81 people, with thousands more infected.
President Trump tweeted Tuesday that the United States is in “very close communication with China concerning the virus.”
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
Last modified: June 24, 2020 1:05 AM UTC