Bitcoin Beats Gold in Safe Haven Battle as Coronavirus Death Toll Rises

The spread of coronavirus has investors turning to safe haven assets. Surprisingly, bitcoin appears to be one of them.
bitcoin, btc price
Bitcoin's 60-day correlation with gold turns positive for the first time this year. | Image: REUTERS / Anton Vaganov / File Photo
  • Bitcoin’s price comes within a hair of $9,000, its highest level in over a week.
  • Bitcoin’s correlation to gold flips positive, according to Bloomberg.
  • Fears of a coronavirus pandemic put a damper on stocks and other risk assets.

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.

Bitcoin Rallies; Altcoins Follow

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.

Bitcoin, BTC price
Despite its recent consolidation, bitcoin remains in a firm uptrend above the 50-day moving average. | Chart: TradingView

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-Gold Correlation

Bitcoin
Is bitcoin finally living up to its ‘digital gold’ title? | Source: Shutterstock.com

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.”

President Trump tweet
President Trump tweets about coronavirus on Monday. | Image: Twitter

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.

Josiah Wilmoth edited this article for CCN.com. If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

Sam Bourgi

Sam Bourgi

Financial Editor of CCN.com, Sam Bourgi has spent the past decade focused on economics, markets, and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance, and Forbes. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com or at LinkedIn. Visit his Muck Rack profile here. Sam Bourgi is a Trusted Journalist.

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