With gold setting a new all-time high (ATH) and Bitcoin (BTC) surging past $11,000 for the first time in over 11 months, market observers say investors are focusing on haven assets while governments prepare for another round of economic stimulus activities.
Market Uncertainty Acting as Tail Winds for Bitcoin and Gold
As of the time of writing, Bitcoin — the largest crypto by market capitalization — has set a new 2020 price high, and gold broke its all-time high.
Much of the recent price revival for these haven assets has come over the last few weeks, with investors worried about the health of the equities market. Tweeting on Monday, ShapeShift CEO Erik Voorhees predicted that BTC and gold will continue to see gains in the coming months.
According to Voorhees, both assets constitute “complementary pieces of the future financial system.” Indeed, investors worried about market uncertainties, and currency debasement could see Bitcoin and gold as viable hedges.
BTC and gold prices seeing a bullish advance is also coming at a time when major economies are gearing up for further stimulus payments owing to economic slowdowns occasioned by COVID-19. As previously reported by CryptoPotato, EU leaders agreed on a $2T spending plan earlier in July, with almost half of the funds budgeted for coronavirus recovery plans.
For former hedge fund manager Jim Cramer, the current gains for precious metals indicate goldbugs expecting infinite quantitative easing (Q.E.). Appearing on CNBC on Monday, Cramer argued:
“Gold is to me a sign there will be no vaccine. The equity market is very hopeful that there will be a vaccine, but the gold market thinks that there won’t be and the gold market thinks we’ll be printing money forever.”
Weakening U.S. Dollar
The prospect of further money printing by central banks likely means a continued currency debasement with the U.S. Dollar already at a two-year low against the Euro. The U.S. equities market is also experiencing some decline despite sustained cash injections from the Federal Reserve.
As a result, Bitcoin is beginning to see some decoupling from U.S. stocks. Such a trend, if continued, might revive the BTC haven asset narrative, especially if the likes of the S&P 500 and the Dow Jones fail to post any significant recoveries in the coming weeks.
Recent reports of multiple vaccine trials reaching final-stage testing might provide a trigger for U.S. stock market gains. According to The Guardian, U.S. public health expert, and member of the White House coronavirus taskforce, Anthony Fauci says a vaccine for the deadly virus might be available in the fall.