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Bitcoin Is No Safe Haven Like Gold - World Gold Council

Kitco News

(Kitco News) - In a head-to-head competition for the best safe haven asset, gold wins hands down against cryptocurrencies, according to the latest research from the World Gold Council.

Adam Perlaky, researcher with the WGC, said in a report published Tuesday that looking at price action in the fourth quarter of last year there really is no substitute for gold.

“In Q4 2018, as global stock markets experienced their worst quarter since 2009, cryptocurrencies had a prime opportunity to demonstrate qualities associated with safe havens like gold,” Perlaky said in his report. “However, cryptocurrencies, such as bitcoin, behaved like risky assets and fell while gold rallied.”

The analyst noted that in the final quarter of 2019 bitcoin fell 55%, while the Nasdaq dropped 19%. However, gold on the other, hand rallied 9.4%.

Perlaky added that bitcoin and the Nasdaq had a correlation of 0.69 points last quarter while gold was negatively correlated with the tech index by 0.73 points.

“The fourth quarter offered just one data point for bitcoin analysis, but it was an important one. This was one of the few periods during which true market stress has occurred since the financial crisis. And it should lead investors to reassess their reasons for investing in cryptocurrencies,” Perlaky said.

Last year’s weakness in bitcoin has continued through the new year with the price of the digital currency trading near its month’s lows. Bitcoin last traded at $3,486 a token. Meanwhile, gold has seen its momentum grow as prices have pushed through $1,300 an ounce. April gold futures last traded at $1,315.90 an ounce, up 0.50% on the day.

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