As Russia goes to war, traders choose gold and fiat safe havens over bitcoin.

bitcoin vs gold in the market

Bitcoin VS Gold

Trends in the market

The decision by Russia to go to war with Ukraine has sent shockwaves through financial markets. While stocks and bitcoin are falling, gold, oil, base metals, agricultural commodities, and currency markets safe havens such as the US dollar and the Japanese yen are rising.

In general, markets are showing the customary anxiety caused by international concerns. However, some in the crypto industry may be disappointed that the leading cryptocurrency has yet again failed to get a haven bid.

The decision by Russia to go to war with Ukraine has sent shockwaves through financial markets. While stocks and bitcoin are falling, gold, oil, base metals, agricultural commodities, and currency markets safe havens such as the US dollar and the Japanese yen are rising.
In general, markets are showing the customary anxiety caused by international concerns. However, some in the crypto industry may be disappointed that the leading cryptocurrency has yet again failed to get a haven bid.

It’s very evident that institutional investment hasn’t done what it was meant to achieve for bitcoin, at least in the perspective of crypto investors – that is, establish the cryptocurrency as a stronger digital safe haven than gold. The fact that fiat safe havens are doing better than bitcoin perhaps indicates that the cryptocurrency market as a whole is at the far end of the risk curve. Bitcoin was a largely uncorrelated asset before the covid crash and more so during the early bull cycles when institutional participation was almost non-existent.

Bitcoin chart daily

Bitcoin chart daily

A persistent risk-off environment might bring bitcoin down below $30,000, which served as a solid support zone in January 2021 and for the next three months until July 2021. A possible breach lower would confirm a weekly double top collapse and invite additional selling pressure.

Is a Long-Term Risk-Off Ahead?

According to some, the asset price drops caused by Russia’s miscalculation may have legs. Putin’s war, as well as the West’s retaliatory sanctions against Russia, a key energy exporter, may worsen supply chain difficulties, driving up prices. According to a chart provided by The Daily Shot newsletter’s Twitter handle, the New York Fed’s global supply-chain pressure index is presently at its highest level since the 1990s. Brent crude oil has surpassed $100 for the first time since 2014.

“There is little question that an increase in commodity prices would result in inflationary pressures. Russia and Ukraine continue to be major exporters of precious metals and agricultural products. The present dispute is sure to have an impact on global pricing “Stack Funds’ COO and co-founder, Matthew Dibb, stated.
Dibb went on to say that the mix of conflict, supply restrictions, soaring commodity prices, and zero interest rates is a prescription for stagflation. While the crypto community still believes bitcoin is a better store of value, historical evidence suggests that the cryptocurrency is primarily a risk-on inflation hedge, meaning it outperforms other assets when investors are ready to take a risk.

In the aftermath of the Russia-Ukraine conflict, traders are flocking to commodities or so-called real-world assets, which may not change anytime soon. Regulators throughout the world, including Ukraine’s, continue to be anti-crypto, and the Fed is unlikely to abandon plans to boost borrowing prices this year.
“We would keep short positions in the majority of markets and contemplate long positions in precious metals. Perhaps agriculture and commodities as well “Laurent Kassis, director of CEC Capital and a crypto exchange-traded fund (ETF) specialist, stated in a Telegram discussion.

Commodities and precious metals are underweight at Goldman Sachs. “You need to look at alternatives to preserve the portfolio,” Glissmann said on Bloomberg TV. “Raising cash is one approach to decrease risk, but we’ve also considered gold, safe haven FX, and commodities in general as a bit of a safe haven since they’re at the heart of this crisis.”

Bitcoin price now

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