Cryptocurrency volatility makes Gold a safe haven

Cryptocurrency market has gained mainstream attention by giving heavy gains to its investors. Amid the global pandemic, investors began to find digital assets as a store of value and inflationary hedge. Following the scenario, several institutional inventors also began to accumulate virtual assets in their investment portfolio. Notably, many began to consider cryptocurrencies as safe haven. However, in the current scenario it seems the money from the crypto market seems to be moving into Gold.

Cryptocurrency investors seems turning to Gold

Bitcoin has been performing with a good pace due to several reasons, among which the inflation remained the primary one. Experts in the cryptosphere believe that Bitcoin is almost a law itself, even in the altcoins market. 

However, after an amazing bullish rally, the digital assets market crashed last month. At the time Bitcoin had lost more than 50% of its value, and it is estimated that the coin will continue to lose more to 75%-80%.

As the crypto market began to fall investors began to find another safe haven to store their funds. Notably, it seems that the money from the market is moving towards traditional Gold. Following the data from GoldPrice, we have observed a recent upswing in the traditional Gold’s price.

Demand of investors seems taking a u-turn

Gold is the traditional asset which faced a drop in demand during the COVID-19 pandemic. The fall in the price of Gold was caused by the shut down of jewellery trade. However, now it seems that the things in the financial market are changing. The global economy is reopening and soon the jewellery trade will be revived, which will bring a major recovery in the price of Gold.

On the other hand, the volatility in the crypto market is also causing a wipe out in the number of investors. Cryptocurrency market analysts believe that the volatility is in a league of its own. Such higher peaks and lower troughs are not found in conventional markets.

Crypto market is just a penny on the dollar

Although Bitcoin and the entire cryptocurrency market performed well achieving more than $1 trillion of market cap, it remained a penny on the dollar. Where the digital currency market valued near a trillion, the Gold market valued at $7.9 trillion. Moreover, the United States stock market is valued at $28 trillion. It is also worthy to note that a lesser force could have a greater impact on the digital currency market.

   

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