For several weeks already, volatility in the financial markets has been hammering at many-month highs, reflecting the general uncertainty surrounding the growing geopolitical tensions in the Middle East, as well as the ongoing trade confrontation between the US and China.
It must be acknowledged that passions on this subject not only subside, but also with enviable regularity, are fed in the form of another aggravation of the situation in Syria or a sudden strengthening of Donald Trump's protectionist position, which continues to terrorise the public through his own twitter.
The crisis events that are developing in the world economy make everyone, who is somehow involved in investing in financial markets puzzle themselves with a completely predictable question: "Can I make money on this?" The classical economic theory says: every time, when it comes to geopolitical tension, crisis or economic instability, the stake should be made on defensive assets, which include the Japanese yen, franc, bonds of developed countries and gold. In fact, the price of gold reached its maximum, only last week, since August 2016 - $ 1369.4 per ounce against the background of the threat of a missile strike by the coalition led by the US over Syria.
Those interested in the crypto industry have one more question, "do such events affect the bitcoin rate"? It is noteworthy, but at moments of the greatest demand for gold, Bitcoin demonstrated positive price dynamics. In other words, it can be assumed that bitcoin itself has, albeit not so pronounced but still protective properties. Recall that in 2010-2013 the popularity of bitcoin gained momentum when the world markets broke out the regular currency wars, in which the United States, China, the European Union, Japan and many other countries participated.
The correlation between gold and Bitcoin could have been more pronounced if it were not for the recent events related to the criticism with which world regulators and governments of different countries have fallen upon the entire cryptosphere; namely, the numerous taboos against operations with cryptocurrencies and have undermined the investors' confidence in the bullish future of bitcoins. By the way, now the same thing is happening to Bitcoin that once happened to gold. In the 1970s, in the course of the conflict between the United States and France, the gold dollar standard, which for many years supported the prestige of the precious metal, was under attack.
Gold became unwieldy, its supplies grew more slowly than the world economy. This led to a reduction in the amount of money in relation to the growing number of transactions. Nevertheless, the subsequent revaluation of real value breathed a second life into gold. Perhaps the new problems with fiat money can revive the former interest in the crypt. It can happen very soon. In the meantime, we recommend that you focus on the news risks of the coming days. Considering that until the end of April the US can expand the list of goods for which new import duties will be extended, the threat of a trade war will again become obvious. Probably, even this time, Bitcoin will show a direct correlation with gold and will be able not only to win out on the growth of geopolitical risks, but also to break above $ 8,500.