BitcoinbtceurbtcgbpbtcusdbtcusdtNews

Novogratz: Gold and Bitcoin have ‘Same Thesis’ as Precious Metal Starts Rallying

0

With the traditional markets and general world economy being hammered, including gold and Bitcoin, by the Covid-19 outbreak, the first of the major reactions have started filtering through. For the US and its Federal Reserve, the answer has been a cash stimulus program to the tune of trillions and an ‘infinite supply of money’ to be printed. 

This decision by the Fed may well be what the government feels will help push the US economy along in these difficult times, but it is also a move that will ultimately devalue and inflate the US dollar. This could have longer ramifications down the line, and it is also being proven though the movement of gold.

The gold price was one safe haven asset that dipped when the crisis first started unravelling which many questions. It was also a surprise when Bitcoin fell in correlation to the traditional markets. But now, with the first shock to the system over, both gold and Bitcoin are reacting to centralized market movers. 

Gold reacts to stimulus packages

Gold dropped down to a low of $1,480 amid the Covid-19 crisis but in the resulting weeks it has managed to climb back up to a local high of nearly $1,700. It appears that most of this renewed price action has come as a result of the stimulus towards the dollar. 

It is often observed when policies are enacted that lead to the weakening of the dollar then the price of gold anti-correlates to this as it enacts its safe have status. Of course, the gold price is not only reacting to the Fed as a number of reserve banks have been printing money,

It was noted by twitter account @bloqport that amid this crisis the likes of the European Central bank have printed $821 billion; the US Fed – $700 billion; the people’s Bank of China $100 billion and the Bank of England $330 billion.

This is the reason behind the rise in gold’s price and for Galaxy Digital CEO Mike Novogratz, it is a good thing. 

Gold and BTC Same thesis

The point that Novogratz is making is that gold is reacting to the weakening dollar and other world currencies just like Bitcoin was created to be a hedge in the same situation. More so, Bitcoin is showing that despite falling when the crisis began, it still has the potential to be a hedge having made some impressive gains back in a few weeks. 

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

Nugget’s News: Corporate Debt & The Colder War. Gold, Silver, Oil & Uranium with Marin Katusa

Previous article

Kleros poised for success in the forthcoming WFH era

Next article

Comments

Leave a reply

You may also like

More in Bitcoin