15 Feb 2021 – Gold/Silver/US Dollar/Crypto Discussion
Gold and silver are falling in value. Bitcoin is next?
Cryptocurrency price does not rise due to market manipulation
In the next 3-5 years, the cost of cryptocurrency will increase
International consortium of news organizations developing transparency standards.
Gold and silver continue to lose value amid escalating conflict between the United States and China, electoral hype in America and a possible second wave of coronavirus. Most likely, Bitcoin will also react to this situation with a fall.
Gold lacks support
The deepening conflict between the United States and China, as well as the lack of a sound monetary policy in America, put pressure on the precious metals market. Silver was the first to emerge from the price race. Since August, the precious metal has been declining in price and today is trading at $ 24 per troy ounce, returning to July levels..
Following silver, the value of the main precious metal also falls. Gold proved to be a defensive asset during the crisis, but the lack of support from investors led to a fall in the value of the asset. The price of gold fell to $ 1907 per troy ounce, although in August the price of the precious metal approached a record $ 2046.
It is likely that the decline in the value of gold will negatively affect the cryptocurrency market. Indeed, over the past six months, Bitcoin has shown a clear correlation with the precious metals market. Therefore, a fall in the price of gold may be a harbinger of a decline in value and MTC.
Recall that the yield on 10-year Treasuries showed the maximum jump since June on the eve of the expected auctions, at which record amounts of US government and corporate debt are to be presented. Also, the positive dynamics of profitability could be influenced by unexpectedly strong data of the report on producer prices (PPI).
As a result, gold prices dropped to the $ 1,900 mark, demonstrating the maximum intraday fall since June 2013. It should be noted that such volatility is very unusual for a precious metal. As a rule, the amplitude of fluctuations of this protective asset during the day rarely exceeds 2-3%.
What awaits Bitcoin after the fall in the price of gold
Bitcoin may react to the decline in the value of gold with a sharp drop. The cost of the coin has already dropped to $ 10,445 and this is not the limit. The reason for further weakening can be both external factors and market manipulations. This was previously stated by a group of researchers from the Saxe Business School, who conducted their own market analysis during the coronavirus pandemic..
According to them, after the collapse of the stock, commodity and foreign exchange markets, investors should have found a haven for their assets in gold and bitcoin, which were least affected by the crisis, but, nevertheless, this did not happen. Experts explain this behavior as a consequence of market manipulation.
However, most crypto experts are optimistic. Ruchir Sharma, chief strategist at Morgan Stanley Investment Management, said that alternative investment vehicles such as gold and bitcoin will continue to rise in value amid an endless supply of money from central banks.
Speaking about alternative investment assets, the chief strategist of the investment company primarily refers to gold and bitcoin, which have strengthened against the backdrop of the coronavirus pandemic. When asked by a journalist about the most profitable investment, Sharma replied that “this is the choice of generations.” In his opinion, older people still buy gold, but millennials prefer to invest in bitcoin..
However, he noted that “gold is a very speculative asset”, stressing that “in the long term, stocks are much better than gold.” Sharma also cited an article in The New York Times, which stated that over the past 100 years, inflation-adjusted US stock returns have been about 7% per year, compared to 1% for gold..
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