Bitcoin and gold at record highs are sending contradictory signals about global risk appetite. The cryptocurrency and precious metal set their first simultaneous records since Bitcoin launched more over a decade ago. Gold has been a store of wealth for millennia, but Bitcoin's significance beyond speculation is highly debated.
Bitcoin has risen over 50% this year due to inflows into newly launched US exchange-traded funds that contain it. However, gold's gain may signal defensive positioning due to geopolitical uncertainty or a global stock downturn after a record run
Chris Weston, head of research for Pepperstone Group Ltd., suggests looking at traders who chase short-term momentum across asset classes to square the circle.
Gold has been hugely traded overnight, the volumes are massive—I've had many client calls asking what's going on," he said. Fast-money investors “are buying the momentum and that is what we are seeing in Bitcoin as well.”
Expectations of looser monetary policy benefit Bitcoin and gold. Swaps markets expect a 62% Federal Reserve interest-rate decrease in June, up from 58% in February.
Bitcoin reached a record $69,191.95 in the US on Tuesday, surpassing its prior peak of November 2021, before falling to $63,300 in Singapore at lunchtime Wednesday.
On Tuesday, gold reached $2,141.79 an ounce, surpassing the early December high. The precious metal rose roughly 5% in five sessions.
Kyle Rodda, senior market analyst at Capital.Com Inc., linked crypto to equities markets and risk-taking. “We’re seeing a resurgence in meme coins that suggests irrational, risk-taking behavior — which is consistent with some equity market developments.”
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