The bitcoin price is trading mostly flat today despite the fact that the stock market got hammered, with the Dow Jones tumbling some 400 points. Meanwhile, the gold price is looking bullish and is currently trading above $1,500 per ounce. For some reason, investors flocked to the precious metal instead of digital gold, at least today, as fears of a recession, either in the short-term or long-term, loom. Crypto trader Brian Kelly on CNBC said that “macro buyers are using bitcoin as a currency hedge” but adds that BTC wallet address growth, which reflects user adoption, isn’t where it needs to be.
For months, bitcoin has been looking like a safe-haven asset in this uncertain global economy. Trader Peter Tchir points out in Forbes that the BTC price has been “[moving] more or less in lines with the headlines.” As a safe-haven asset should, the price has ebbed and flowed in tandem with the tone of trade talks between the U.S. and China. Not today. If you’re wondering why you’re not alone. Tchir suggested on Twitter that it could have something to do with the “new China crypto chatter.”
Bloomberg Crypto reports that “China’s central bank says its own cryptocurrency is ‘close’ to release.'” China’s move toward a digital currency is seemingly defensive in nature, with tech companies such as Facebook now plotting to create their own coins that would threaten the status of fiat money. BC Technology Group’s Dave Chapman told Bloomberg:
“It is without doubt that with the announcement of Libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets.”
Gold Price Rises, Bitcoin Sits Still
Gold, meanwhile, didn’t skip a beat, surpassing $1,500 and behaving as a safe-haven asset should during times of economic turmoil. Political economist Marc Chandler points out that it’s only been a couple of months since gold was hovering at the $1,400 level. Chandler has “turned bullish,” attaching a $1,700 price target on the precious metal. Goldman Sachs lifted its price target on gold, too, but it is also bullish on bitcoin.
Gold mining stocks are similarly on a tear, with the sector up an impressive 41 percent year-to-date, as pointed out by Robeco’s Jeroen Blokland, while the broader market’s highs slip away. Bitcoin may just be experiencing the summer doldrums. After all, we are in the middle of the dog days of summer. Even BitMEX CEO Arthur Hayes is taking a break until September.
Recession or not, Bitcoin’s next aggressive bull run could return when he does.