As Coronavirus spreads worldwide, it’s been another good week for Bitcoin. With the BTC price up 8.135% in the last week with a price of $9359.98 at time of writing, the rise closely mirrored that of gold's, while we see stock markets around the world collapse.
According to several analysts, the coronavirus scaremongering and the increasing death toll are closely correlated with the rise in the value of the leading cryptocurrency.
Stock Tumble while Gold and Bitcoin reap the Rewards
Many claim that fearmongering of world events is driving investors of traditional assets such as stocks, to reduce holdings. And looking at different stock markets around the world, it's apparent they're heading for the safety net.
In Asia the Nikkei, which closed the weekly at a loss of 2.03%. And after coronavirus fears infected Europe, the markets of the old continent saw an overall loss of more than 2.3%.
According to Bloomberg, despite the fact that Bitcoin is still considered a risky investment, it is again behaving like gold. Fears of a global coronavirus pandemic seem to have reignited Bitcoin's role as digital gold.
At current value, the market cap of Bitcoin is just over $170 billion – the highest it’s been since October 30th 2019.
Bitcoin wasn’t the only digital currency to see a growth last week. Altcoins including Ethereum (ETH), EOS, and Litecoin (LTC) are all up between 12-15%, and the combined market cap of all cryptocurrencies now stands at just over $259 billion.
Bitcoin is Mirroring Gold’s Rise
The rapid growth in the value of Bitcoin was mirrored by the sale of shares in favour of gold and other less risky assets.
The price of gold rose 1.1% to $1,594.70 an ounce on the New York Mercantile Exchange.
The precious metal seems ready to touch the $ 1,600 again only for the second time in seven years.
To add more fuel to the Bitcoin/Gold correlation, for the first time this year, the 60-day correlation of Bitcoin with gold took shape on Monday.
This is highly significant in discovering how Bitcoin might react in uncertain times, and dare I say it a recession.
Bitcoin's most ardent supporters claim it is digital gold. One that allows for the preservation of wealth in the face of economic risks such as recession and hyperinflation, and also one that is more secure and more mobile than gold.
Bitcoin was born just after the recession of 2007/8. It’s never known a recession so it’s hard to know how it will react, but the fact that it’s mirroring gold in times of uncertainty, shows that it could actually be accepted as digital gold by the masses.
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