Bitcoin and gold performed better than other assets during the crisis caused by the Covid-19 pandemic. In March, the cryptocurrency exchange rate declined from $8,100 to $3,800 amid panic in all markets. Despite this, it was able to recover within a month and a half, and in July — to update the annual maximum and reach $12 100.

The precious metal began rising in price at the end of December 2019. At that time, gold was worth about $1,450 an ounce. On August 7, the price rose to $2 072, setting a new historical high. Then the asset began to fall rapidly in price, now it is trading at $1 922, at the moment the quotes fell below $1 870. According to experts, this is just a temporary correction. From their point of view, the quotes of the precious metal will continue to grow as soon as the depreciation of the dollar resumes.

Perhaps the current decline in precious metal prices is because investors began selling the asset because of confidence in the ending of the crisis. However, some traders disagree with this opinion. They believe that the decline in the value of gold is nothing more than profit-taking by its holders.

They assume that the gold exchange rate will again try to gain a foothold above the $2 000 level soon. But if the metal continues to fall in price, this may negatively affect the price of Bitcoin. Between quotations of the assets formed a relationship in recent time, they often rise and fall at the same time. The correlation index has already reached 70%.

If gold continues to fall in price, Bitcoin may benefit from this at the moment. The fact is that if the price of cryptocurrencies is stable, market participants will prefer BTC as a protective asset, and not the precious metal. This will allow BTC quotes to grow.

Experts also admit that the cryptocurrency can act as a protective asset, just like gold, due to the limited issue. However, this feature of Bitcoin has so far been noted only by young investors. The older generation still prefers gold for protection against inflation.

Most experts agreed that it is too early to talk about the end of the crisis and the resumption of the fall in the value of gold due to its sale by investors. Perhaps the dollar will continue to fall against other currencies, and this will cause a new wave of demand for protective assets. Firstly, it can act as a tool against inflation. Secondly, there is a correlation between cryptocurrency and precious metal quotes. Therefore, if the price of gold resumes growth, BTC may show a similar trend.

Previous articleHow to make money on the real estate market growth. Part 1
Next article10 chips of IKEA, which has been trading the same thing for a long time, but you still can’t leave without spending money