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Author Topic: [UPDATED] Bitcoin vs Gold vs The US Stock Market(US500)  (Read 573 times)
mk4 (OP)
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October 02, 2020, 07:14:54 AM
Last edit: October 09, 2020, 06:41:11 AM by mk4
Merited by suchmoon (4), vapourminer (1), LFC_Bitcoin (1), 1miau (1)
 #1

As somewhat expected, since bitcoin and the US stock market in general have been heavily correlated since the past months, they've went down together; whereas gold had a small spike up in price. Unfortunately we're yet to see bitcoin do it's job as a sort of "economic hedge"; hopefully some time in the future.

Completely up to you how you're going to use this information. I just find it interesting.



EDIT(October 7): After Trump has announced that stimulus talks will be delayed until after the upcoming election, the markets dropped a bit. Again, market correlation continues.

Gold
SP500 futures(US stock market)
Bitcoin




Previous chart(October 02, 2020):


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davis196
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October 02, 2020, 11:47:11 AM
 #2

This chart is another proof that Bitcoin is not a safe heaven asset.Gold is still the one and only safe heaven asset,while BTC and the US stock market are following the same price patterns.
I guess that the COVID-19 announcement made by Trump scared a small part of the traders,so they sold stocks and bought gold,but this is only a short term impact.The US stock market is going to be crazy in the next few months.

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October 02, 2020, 12:19:40 PM
 #3

For the stock markets it might seem to be a huge event, but for bitcoin it is not. The change is single digit percentage for bitcoin that has been negligible for years now, and we know that wilder and more erratic declines and spikes have been recorded than this. For sure most bitcoiners don’t really care about the drama of the events on the US, and only those who are directly affected by this which obviously are the Americans. But yeah, it is too small of a change to be worried about IMO.

And for the presidential aide whom the Trumps came in close contact with, you did the USA a whole favor for Trump to acknowledge the disease finally.

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October 02, 2020, 12:45:36 PM
 #4

When I first heard Trump and his wife had tested positive for coronavirus I knew precisely what I should do with my bitcoin - just hodl it further despite market movements. I decided for myself that bitcoin is a store of value, just like that. This is how SoV part of money is born. The more people refuse to sell bitcoin, the less volatile it gets, the less it fluctuates on every single news. I don't understand those people who claim that bitcoin is neither a safe haven nor is it a store of value. Your opinion is simply based on the wrong assumptions, you trust others emotions (market small movements) more than your perception and your experience.

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October 02, 2020, 12:48:14 PM
 #5

This chart is another proof that Bitcoin is not a safe heaven asset.Gold is still the one and only safe heaven asset,while BTC and the US stock market are following the same price patterns.
I guess that the COVID-19 announcement made by Trump scared a small part of the traders,so they sold stocks and bought gold,but this is only a short term impact.The US stock market is going to be crazy in the next few months.
I'd rather think that the Bitcoin market is still just way too uncertain right now due to immaturity. If you take a look at it, while it surely did follow a hard decline similar to stocks, from 00:00 to 06:00 it's almost like it didn't know what to do.

If we think about it, maybe Bitcoin isn't neither a safe haven asset or a stock-related one. Maybe it's something different and this is why it also acts differently. We still try to attach Bitcoin to different definitions, terms and categories yet we never think it might actually fit into an unique definition of its kind.
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October 02, 2020, 01:44:17 PM
 #6

This chart is another proof that Bitcoin is not a safe heaven asset.Gold is still the one and only safe heaven asset,while BTC and the US stock market are following the same price patterns.

It sure isn't right now(price wise), but the long-shot bet is that it will hopefully be a good hedge against economic uncertainty in the future. Regardless the price movement though, I'd still rather hold bitcoin than gold. Bitcoin's easy self-custody characteristics is a really important factor when talking about economic hedges in my opinion.

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October 02, 2020, 02:09:51 PM
 #7

Looking at the chart it seems the rally of gold happened almost immediately after the prices of stocks and Bitcoin fell. Can it be said that the money that came out from stocks and Bitcoin entered gold?

By the looks of it there seems to be an inverse relationship between stocks and Bitcoin on the one hand and gold on the other. So if you are closely monitoring the stock market and you want to hedge your funds then, based on the chart, you should be going into gold rather than Bitcoin.
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October 02, 2020, 02:57:46 PM
 #8

Can it be said that the money that came out from stocks and Bitcoin entered gold?

Totally possible, but it's going to be hard to make such conclusions in cases like this, because of a few factors:

1. Probably only a minority of bitcoiners are actually interested in buying gold.
2. Not all stock market investors are interested in economic hedges, as I think most are interested in taking advantage of the uncertainty by buying value stocks.
3. It could probably just be goldbugs being more bullish on gold.

But then again, we can't really know this unless we grab all the data from multiple bitcoin exchanges, stock brokerage platforms, and online precious metals dealers.

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October 02, 2020, 03:32:14 PM
 #9

Therefore we conclude that nothing is to be considered as a safe-haven investment, everything will change, and might gold will experience like this before. Even oil prices also fell down yesterday the same goes for Bitcoin and the stock market as well.

But I have doubt that this is a short impact after the announcement has been released by Trump, the fact that there are still big investors afraid of Bitcoin as an investment. Even Bitcoin has appeared to lead the losses dropping among other investments but I think it will recover quickly soon as we know how to fluctuate Bitcoin price.
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October 02, 2020, 04:09:14 PM
 #10

From the bottom range, among Bitcoin, Gold, SP500, Bitcoin is the best one in terms of rallies. The chart shows that fact. I don't want to put too much detailed stats on the chart and mess it up.

If you care curious about my statement, you can use the Forecast and get the percentages of rally from bottom for each of these three (Bitcoin, Gold and SP500). You need to take into account the past rallies and today crashes. Even using today prices, bitcoin is still the best rallying asset.

https://www.tradingview.com/chart/?symbol=BITSTAMP%3ABTCUSD

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October 02, 2020, 04:19:17 PM
Last edit: May 16, 2023, 03:13:03 AM by pawanjain
 #11

May be these are just the panic investors who panic buy/sell their assets when they hear any news. We all know panic investors are present in both Stocks and the Crypto market.
On hearing this news may be these people sold their assets hoping that the market would crash. But to be honest, the market did take a dip but not much. It's kinda negligible.

Also, since Bitcoin is mostly paired with USD the price is expected to fall down but if we compare it to another coin for example ether then there isn't much difference at all.
The below chart shows that the price hasn't changed much in the past 7 days when BTC is paired with ETH.



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October 03, 2020, 04:17:58 PM
 #12

Also, since Bitcoin is mostly paired with USD the price is expected to fall down but if we compare it to another coin for example ether then there isn't much difference at all.

The below chart shows that the price hasn't changed much in the past 7 days when BTC is paired with ETH.

I mean, of course it doesn't, because most cryptocurrencies like ETH mostly follow BTC's price, not the other way around. There's a reason why almost every asset is paired with USD; and it's because it's one of the more sort of "accurate" assets to compare to, not like ETH which mostly follows bitcoin, and is a lot more illiquid compared to other assets.

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October 03, 2020, 05:01:30 PM
 #13

May be these are just the panic investors who panic buy/sell their assets when they hear any news. We all know panic investors are present in both Stocks and the Crypto market.
On hearing this news may be these people sold their assets hoping that the market would crash. But to be honest, the market did take a dip but not much. It's kinda negligible.



I agree with you, this is mostly because of panic sellers. As you mentioned, they are everywhere in the Bitcoin market and in the stock market, and when they hear such news, they sell their assets, which leads to such a decline.
As for me, I think things are fine and after a short time everything will return to the same and better.


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October 03, 2020, 10:18:33 PM
Merited by mk4 (1)
 #14

This chart is another proof that Bitcoin is not a safe heaven asset.Gold is still the one and only safe heaven asset,while BTC and the US stock market are following the same price patterns.
---cut---

For now.

If gold would be under similar political pressure as bitcoin is, or if there would be any threat that governments could make illegal to hoard it (again), it wouldn't act as a safe heaven either. Gold isn't better, it's just currently on good terms with governments.

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October 03, 2020, 10:56:05 PM
 #15

Despite this new, it doesn't show in the price of Bitcoin that much in comparison with what we used to experience before. All of them have their purpose and can stand independently. Gold has proven to be a save heaven and BTC also has this quality despite all hurdles and condemnations, it still survives and might be the king in the future

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October 04, 2020, 02:35:58 AM
 #16

For now.

If gold would be under similar political pressure as bitcoin is, or if there would be any threat that governments could make illegal to hoard it (again), it wouldn't act as a safe heaven either. Gold isn't better, it's just currently on good terms with governments.

Exactly my thoughts. If gold as a publicly traded asset was also only 11 years old, I'd assume that it would also be as illiquid and probably as volatile as bitcoin, and it wouldn't also be an effective economic hedge. We won't get to that stage with bitcoin in just a decade; it's going to take time.

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October 04, 2020, 08:11:01 AM
 #17

Despite this new, it doesn't show in the price of Bitcoin that much in comparison with what we used to experience before. All of them have their purpose and can stand independently.
I agree but based on graph displayed by OP somehow bitcoin in a turnoil. It goes down but for a split days only. I am one of those who decided to put first on stablecoin majority of the asset cause anytime bitcoun could go down. Also include with that the recent news on bitmex issue where Arthur Hayes platform will be closed. Bitcoin holders panic and price suddenly go down. I think gold could be more safe than bitcoin. Crypto is really hard volatile so dont expect it to be much more safe than gold.

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DrG
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October 04, 2020, 08:17:43 AM
 #18

Gold is only safer in that you know the price isn't going to really go up or down. Look at it's 1970s price and today's price... I guess with inflation figured in it actually lost value over half a century.

The only meaningful time I can say BTC is tied to the DJ/NASDAQ/S&P is when institutional investors start pulling major weight into it. At the current time Coinbase has more clout than the POTUS.
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October 04, 2020, 10:12:50 AM
 #19

Just having a fixed supply doesn't guarantee being a hedge. Bitcoin is still an extremely risky and speculative investment, it doesn't even have some predictable fundamentals that you can use to calculate its value, and it's not enough that a small group of people believes that it's digital gold, because the rest of the population doesn't, and they won't be using it as a hedge, so it's natural for the speculators to dump it when there's uncertainty.
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October 04, 2020, 03:21:23 PM
 #20

For the stock markets it might seem to be a huge event, but for bitcoin it is not.

This. Loss was big for stocks but just a regular day for Bitcoin.   


Yes I agree with OPs concern that Bitcoin followed stocks and not Gold. But if we look from dothebeats perspective Bitcoin price stayed pretty unaffected. It was just a normal day. Gold went up, stocks down. Bitcoin stayed same.
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