Hodl On!
“Hodl On!” – a cartoon that illustrates how Bitcoin and Gold are going through one of their convergent phases during a time of increased global tension.
In a striking turn of financial events over the last couple of months, gold and Bitcoin have both soared to record-breaking highs and then both saw a correlated response to the recent spate of conflict in the Middle East.
After acres of press on asset divergence and the rubbishing of Bitcoin as an asset like gold, it seems non-monetary policies might be causing the assets to converge for the short-term.
Gold prices have seen a recent rise driven by some central banks (e.g. Turkey, China) building their gold reserves, which saw a 39-ton increase in January 2024 alone.
Meanwhile, the surge in BTC has been accompanied by a notable influx of investments into crypto ETFs and the market baking in the Bitcoin halving event. But, it seems likely that this convergence is short-term based and long-term the two assets will diverge again .
As Matteo Greco at Fineqia International Inc remarked, “Bitcoin is still perceived as a risk-on asset and serves more as a long-term store of value rather than a hedge for specific moments of macroeconomic tensions.
