Investors appear to treat bitcoin as a gold-like haven asset.
Data from eToro, an online trading platform, showed a 284% spike in bitcoin trading between May 19, 2019 and August 19, 2019.
In uncertain times, gold, a popular asset, rose 73 percent less than in the same period.
At certain major moments in the trade war, bitcoin trading has more than doubled.
Here are three examples of eToro's emphasis on Markets Insiders by email this year:
- 13 May The new gold position on the eToro platform surged 108 percent from the day before after China retaliated against the U.S. for an announcement of a tariff increase on US commodities worth $ 60 billion. New bitcoin position increased by 139%.
- 25 June The report said the United States was preparing additional tariff delays on Chinese goods at the meeting with Donald Trump. Bitcoin position rose 40%, while gold position increased 26% from the day before.
- August 13 After the United States delayed imposing tariffs on various Chinese products, including health and safety, national security and other concerns, the new bitcoin position increased by 123%, more than double the 60% increase in gold position.
Simon Peters, an eToro analyst, said the number of open positions for bitcoin and gold has increased as the US and China's trade wars are fierce and the world's two largest economies beat tariffs on each other's products.
The scarcity, usefulness, and intrinsic value of gold are not affected by the central bank's interest rate decision. As a result, the metal has historically been a haven for investors in times of economic and political turmoil, Peters added.
"Bitcoin shares gold-like traits in that only a finite amount (12 million) exists and is decentralized, prices are not affected by inflation, and have additional benefits over low storage gold. Litigation costs. "
Bitcoin is a more volatile asset than gold and faces additional risks, Peters said. But investors seem to warm cryptocurrency as a haven.
“The suspicion of extreme price volatility, hacking and price manipulation is still weighing on its fame. However, the correlation with gold on the eToro platform may be a sign that the overall perception of bitcoin is gradually moving from speculation to low risk value storage. "
Best Source: https://www.businessinsider.com/bitcoin-safe-haven-gold-during-us-china-trade-war-2019-8