Last night or Tuesday morning overseas gold futures began trading lower and by the time that New York markets were opened for trading it was not long before gold futures broke back down below $2,000 per ounce. Gold was not alone in losing over 5% in fact, all of the precious metals lost at least 5% in value yesterday. Interesting because Bitcoin was also trading down $500 or 4% was down 5% at its lows on Monday.
In our first chart we have daily candlestick charts of BTC futures on top and gold futures bellow from the start of 2020 to present day. It’s shocking how large moves in one market usually appear in the other market with similar lows and especially highs occurring in the same time frame in both gold and Bitcoin.
Then I asked the question, if recent rallies in Bitcoin were synchronized with gold but hasn’t yet matured into a true safe haven what does this tell us? To me it is clear that Bitcoin is being used more and more just as gold has served for decades, the flight from cash.
In fact, our second and third charts demonstrate how the U.S. Dollar Index (DX #F) has traded pretty accurately opposite the moves in BTC. Today we had further weakening in the dollar index down half a percent today. This however was not enough to take the overcrowded precious metals higher as all were lower today. Bitcoin futures however traded up by 1.5% and with all the capital flooding out of central bank currencies and an already overly inflated precious metals complex Bitcoin is poised to be the next place people may want to hold rather than an inflationary currency.