As bitcoin approaches three-month highs, it’s looking a lot more like a safe haven asset. | Image: shutterstock.com
- Bitcoin (BTC) peaks at $9,429.99, its highest in almost three months.
- At its highest point Wednesday, the largest cryptocurrency was up 32% year-to-date.
- Bitcoin is behaving a lot like a “safe haven” asset, according to Fundstrat’s Tom Lee.
Bitcoin’s price rallied to nearly three-month highs on Wednesday, as the largest cryptocurrency continued to demonstrate risk-off appeal amid the coronavirus outbreak.
BTC/USD Rallies; Altcoins Follow
Bitcoin peaked at $9,429.99 on Bitstamp, its highest since early November. The flagship cryptocurrency was last seen trading at $9,326, having gained more than 3%.
The technical charts showcase an asset that’s in a clear uptrend. The latest candle on the daily chart puts bitcoin above the 200-day moving average. It blew past the 50-day MA more than three weeks ago.
Bitcoin’s rapid ascent through $9,000 has the bulls feeling emboldened. | Chart: TradingView
At current values, bitcoin accounts for 66.4% of the overall cryptocurrency market. Its market cap of nearly $170 billion represents a $50 billion recovery from last month’s swing low.
Altcoins and tokens followed in bitcoin’s lead on Wednesday, as Ethereum, bitcoin cash, Litecoin and EOS all reported gains of at least 2%. The total crypto market cap peaked near $258 billion, the highest since late September.
Battle of the Safe Havens
Bitcoin is not only the best-performing asset of the last decade, it’s arguably the most attractive haven for investors looking to escape economic and geopolitical risks.
On Tuesday, Fundstrat’s Tom Lee compared bitcoin’s performance to gold in the so-called battle of the safe havens. At the time, bitcoin had gained 26% year-to-date. At the highest point on Wednesday, the year-to-date returns were roughly 32%.
By comparison, gold is up “a decent 3%” on the year.
Thomas Lee compares bitcoin to gold in recent tweet. | Image: Twitter
It didn’t take long for Euro Pacific Capital CEO Peter Schiff to rebut (in the same thread, mind you):
Peter Schiff believes bitcoin is a ponzi scheme and has warned followers to avoid the cryptocurrency like a plague. | Image: Twitter
While bitcoin still has a long way to go before it’s ever considered a bona fide safe haven, its correlation with gold is growing stronger.
For the first time this year, bitcoin’s 60-day correlation with the yellow metal has turned positive, according to Bloomberg. Put differently, bitcoin has been acting more like gold and less like stocks in recent months.
Analyst Mati Greenspan highlighted this trend in a chart that compares bitcoin’s correlation to gold and stocks:
Bitcoin’s correlation with gold appears to be getting stronger. | Image: Twitter
After breaking out of a multi-year bear market, gold could be gearing up for another move higher in 2020 as investors hedge against political and economic risks. If bitcoin is indeed ‘digital gold’ as its proponents claim, the risk-off trend should benefit the dominant cryptocurrency.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
Last modified: February 3, 2020 9:30 PM UTC
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