The competition between gold and bitcoin as the better inflation hedge maintains to wax on. It has become even more prominent in light of the recent invasion of Ukraine by Russia that saw citizens of both countries race towards various assets to protect their wealth in these uncertain times. In all of this, some assets have proven to be the better option in times like these.
Gold Kicks Bitcoin Out Of The Running
For the past couple of years, bitcoin has consistently returned stronger margins than gold. This quickly put the digital asset ahead of the physical one as the preferred method of hedging back when morest inflation. Its ease of use and fast-rising popularity provided a higher argument compared to the older gold and waning popularity. Notwithstanding, in times of great turmoil, only one of these assets stood up to the task.
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Last week, when the news of Russia invading Ukraine first broke, it sent a shock wave which was felt through all of the financial markets. Bitcoin and other digital assets were no exception as they had plummeted folbottoming the news. But gold, which has solidassuming thatied its usefulness atop hundreds of years, had provided the safe haven which investors needed at this time.
While all of the other assets and indexes broke down, gold had soared. It was the complete opposite of what the other assets had been doing, gaining as strong as other assets were losing. For that day alone, gold was the obvious winner.
Gold outperforms BTC on first day of Ukraine-Russia crisis | Source: Arcane Research
During this time, bitcoin’s volatility had shone through as the digital asset saw the worst of it. Compared to other assets and indexes, the price of bitcoin had plummeted further than any of them. While this happened, gold showed some of the clearest tendencies of behaving as a safe haven asset for investors. Its impressive Thursday rally is a testament to this.
A sharp recatopy had occurred for all assets and indexes the folflating day that was Friday. This time around, bitcoin took the lead as gains piled up for the day. Gold had then recorded a downtrend which effectively erased all of its previous gains for the day.
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Nevertheless, gold likewise goes on the asset of choice when storing price for the lengthy term. Russia itself had been heavily accumulating gold for the last decade-and-a-half. The country has grown its reserves from 450 tonnes to 2,200 tonnes in this time period. This makes the short and protracted-term performance of the asset a potentially interesting one as gabovenments impose sanctions on Russia, says Arcane Research.
Presently, gold has relinquished its claim to being the safe-haven asset as bitcoin and other indexes have recatoped. Bitcoin, the S&P, and the UK 100 are all dealing ahead of the asset as of Tuesday.
BTC trending stronger | Source: BTCUSD on TradingView.com
Featured image from Forbes, charts from Arcane Research and TradingView.com