Gold on Track for Biggest Weekly Drop in 7-Years, Acting As A Better Safe Haven than BTC

Central banks pressing the print money switch into “beast mode” will see both bitcoin and gold surging.

  • Bitcoin already jumped 42% from the $3,850 low
  • “Max pain probably resides somewhere between $6,000 to $7,000” – Arthur Hayes
  • “If gold’s being sold to raise cash in an emergency, then it is doing its job as a safe haven” – Brien Lundin

A day before the market went into a full-on panic mode because of Bitcoin price crashing nearly 45%, BitMEX CEO Arthur Hayes published a regular note on March 12th on his exchange where he talks about how despite trading below $8,000 Bitcoin outperformed most global equity indices in 2020.

But not anymore. The world’s leading cryptocurrency is down almost 30% on yearly basis trading around $5,230 after going to $3,850 on Bitstamp and further lower at $3,600 on BitMEX.

However, Hayes believes that we won’t be revisiting $3,000, which we didn’t do exactly, but “max pain probably resides somewhere between $6,000 to $7,000 Bitcoin.” Hays also noted that during these times any crypto hedge fund will be getting distress calls and dumping coins into a falling market which will only push the price lower.

Yesterday, the Seychelles-based exchange liquidated a billion-dollar worth of positions only to go down before it could push BTC even lower. The exchange went online only to be down again.

Trading volume and volatility is going off the charts and the market is in “extreme fear” and “the fear and uncertainty facing humanity is enough to inspire a global margin call,” said Hayes.

Investors selling assets to raise cash

These past few days the US stock markets experienced a rout of a level that was last seen in the 2008 financial crisis that has them tumbling into bear territory. The distress among investors because of the black swan event coronavirus (Covid-19) combing with oil price war not only affected bitcoin but also the traditional safe haven assets gold and Treasuries.

While the Treasury yield has fallen to their all-time lows as investors pile into them, even gold couldn’t escape the effects of the investors' need to jump into cash.

“As the stocks were sitting on their limit down, trading halted, and unable to fall further, investors wanted to free up capital before Lagarde's speech,” said analyst Mati Greenspan.

“The evidence of this is that many other commodities also sold off at the exact same time. Here we can see gold, platinum, palladium, gasoline, and sugar all plummeting around the same time, some of them even worse than BTC.”

After falling 4.5% on Thursday, gold rose 1% on Monday but is still on track to post its biggest weekly drop in about seven years.

“If gold’s being sold to raise cash in an emergency, which is what appears to be happening now, then it is doing its job as a safe haven,” said Brien Lundin, editor of Gold Newsletter.

But for bitcoin, correction means the digital asset losing all the traits of being a safe haven. Bitcoin might be trading like a risk-on asset but it still possesses the properties of being a store of value asset.

Bitcoin to run back to $20,000 by year-end

Bitcoin has been following the stock markets for the past month and on March 12, the sell-off worsened as we lost $8,000 level. In these past two days, Bitcoin has lost more than 50% of its value, which is much higher than the traditional markets but this kind of volatility or drops for the crypto market isn't unprecedented.

Meanwhile, the stock market jumped on the back of the Federal Reserve pumping $198 billion into short-term bank funding operations. Bitcoin jumped today as well, up 42% from the 2020 low we put in yesterday and is currently hovering around $5,250, however, this has been without the intervention of any central bank or government.

According to Hayes, as central banks press the print money switch into “beast mode,” by cutting rates to zero and announcing open-ended QE, bitcoin and gold will appreciate in value but it will take time.

“Bitcoin should enjoy a nice run back through $10,000 towards $20,000 by year end,” wrote Hayes.

Bitcoin (BTC) Live Price

1 BTC/USD =$9,237.3052 change ~ -0.70%

Coin Market Cap

$170.27 Billion

24 Hour Volume

$3.87 Billion

24 Hour VWAP

$9.23 K

24 Hour Change

$-64.4253

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy
AnTy
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,478FansLike
2,795FollowersFollow
4,196FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

US Army Investigative Unit Calls For A ‘Ready' Web-Based Crypto Tracking Application

The U.S Army is looking for a web-based application to help investigate cryptocurrency transactions and transfers, helping in cybercrime investigations. The Investigative Unit of...

Zcash Counts Down to Major Upgrade to increase Privacy and Efficiency

In less than two days, Zcash will have its fourth major network upgrade called Heartwood. This upgrade will be activated at block 903000, which...

Polkadot Holders Votes Could Scale DOT Token Supply by 1000x; A 100x Increase Leads the Polls

The Polkadot community can now vote on a redenomination proposal for its platform’s native token, DOT, which is set to see its supply increase....

South Korea May Classify Crypto As Goods, Not Currencies; Tacking On A 20% Capital Gains Tax

South Korea aims at introducing a capital gain on crypto assets that could be as high as 20% as the National Assembly looks at...

Bitcoin’s New Found Correlation Puts it in Danger

Bitcoin is back to hovering around $9,200 and in red as it continues to follow the S&P 500 but only to the downside. The Dow...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today