Bitcoin is Acting More Like a Safehaven Than Gold
Bitcoin is acting similar to a safe haven asset with uncertainty plaguing the stock market amid President Donald Trump’s aggressive trade policies. Bitcoin was trading at over $8,700 earlier this week and traded above $7,800 on Wednesday morning.
“I watch bitcoin as a signal, as an indicator, not because I want to own it,” said Bleakley Advisory Group’s Peter Boockvar, who is generally bearish on bitcoin. “Over the last couple weeks, we’ve seen this sharp rise in bitcoin, and to me, that was saying something in terms of what markets were thinking about what the Fed was going to do [and about] the turmoil created by the threatened tariffs. ”
The Federal Reserve could cut interest rates twice before the end of the year, prompting uncertainty in stocks, and sending investors towards gold and bitcoin. Trump’s trade wars are escalating as 5% tariffs on Mexico could take effect starting June 10.
Boockvar, Bleakley’s chief investment officer, noted that bitcoin’s recent rally started before the gold rally.
Boockvar believes Tuesday’s stock market rally was a “dead-cat bounce”, denoting a short increase in value after a deep decline.
“For now, this is just a dead-cat bounce back to around the 2,800 level until you get clarity on China,” he said. “I don’t think Mexico goes anywhere. I think there’s no way we would be so stupid to put those tariffs on. To me, it’s all about China right now, and I think, from what I see and hear, this thing is going to last a long time.”
Stocks enjoyed their second-best day of the year Tuesday. Fed Chair suggested quantitative easing is on the table if economic conditions worsen. The U.S. dollar fell lower on the news.
Interest in the cryptocurrency is on the rise, if social media metrics are to be trusted.
As reported by Charles Bovaird, bitcoin’s 30-day average tweet volume increased 17 days in a row and reached an eight-month high on May 28th.
“At 17 days of consecutive growth, BTC is seeing its longest streak of increased 30-day average tweet volume since 2017,” said Joshua Frank, co-founder of TheTIE.io, a cryptocurrency data analytics platform.
Bitcoin is currently trading at $7,822 on Bitstamp, which marks a near $400 increase from its $7,432 low yesterday.