Gold Hits 7-Year High on Coronavirus Fears, Bitcoin Pump Next?
The highly contagious coronavirus is racking up more cases outside of China and causing stock markets to tumble. As a result, investors are shifting to safe haven assets such as U.S. government bonds and gold, but Bitcoin has yet to budge.
As Italy imposed a strict quarantine on 10 towns after confirming 152 cases of the coronavirus, European equities opened lower this Monday.
The Stoxx 600 fell by as much as 3%, marking its heaviest sell-off since the end of 2018. Meanwhile, Germany, France, and Britain’s stock markets followed similar patterns.
The downward spiral in European stock markets echoed investor fears in the Asian region. Seoul’s Kospi also experienced its worst day since late-2018, dropping by 3.9% amidst steadily rising cases of the coronavirus in South Korea.
The S&P 500 and Nasdaq followed suit as well. Wall Street joined the global sell-off dropping by 2.7% and 3.2% respectively at the opening bell.
A massive surge in cases of the coronavirus globally now includes Iran, Europe, the Middle East, and South Korea. This is intensifying investors’ fears about its global impact.
Quoted in the Financial Times, Chief Asia-Pacific economist at ING Robert Carnell, said:
Markets [are] likely to show extreme caution in the face of [the] global spread of the coronavirus — this is no longer solely an Asia issue.
Gold Hits 7-Year High – When BTC Pump?
Unsurprisingly as the stock markets jittered, traditional haven assets saw gains. Gold, in particular, rallied by 1.5%, taking its price to a seven-year high.
Based on past activity, one may have expected bitcoin to react in a similar way over the weekend. The number-one cryptocurrency typically does well in times of global uncertainty.
If the fears continue to rise then, is a bitcoin pump incoming?
23/ Bitcoin is in the process of becoming a macro asset as the market matures. In the meantime bitcoin is also a hedge against the TAIL-RISK of fiat systems collapsing, i.e. a put option on central banks without expiry.
— Alex Krüger (@krugermacro) January 28, 2020
Possibly. Analyst Alex Kruger found bitcoin’s reaction to macro circumstances “extremely bullish” last month. He also pointed out, however, that bitcoin is still “in the process of becoming a macro asset,” so a spike in BTC price is not guaranteed just yet.
Do you think Bitcoin will pump amid escalating coronavirus fears? Add your thoughts below!
Images via Shutterstock, Twitter @Krugermacro, Gold chart by Goldprice.org