With the price of gold outperforming the world’s largest cryptocurrency year-to-date, Russia-Ukraine tensions are pushing investors away from Bitcoin and into the precious metal.
Daniel Briesemann states that gold continues to see safe-haven demand
As we reported on Kriptokoin.com, Russian President Vladimir Putin’s recognition of the two republics in eastern Ukraine that declared their own autonomous structure and The uncertainty after the ‘peacekeepers’ ordered to send troops there triggered another wave of selling in the crypto space.
Markets are now watching closely for potential Western leaders’ sanctions against Russia. Germany has already announced that it has stopped the certification process of the Nord Stream 2 gas pipeline project from Russia. Commerzbank analyst Daniel Briesemann comments:
It is not yet clear when that will happen. Any deployment of troops to Ukraine would likely be equated with an invasion. The West will likely react by imposing sanctions on Russia. The US administration is already planning to impose more sanctions on Russia. Gold continues to be in demand as a safe haven amid all this turmoil.
John Roque: Gold outperforms Bitcoin
Gold at $1,900 after touching $1,915 at the start of the session and trading at eight-month highs stuck around. On the other hand, Bitcoin dropped to around $36,000 overnight and was trading at $37,700, down 0.11% in the last 24 hours at press time.
Year-to-date, Bitcoin is down about 18%, while gold is up almost 4%. This is a throwback to the familiar trading pattern from last year when gold stayed in a pretty tight range and Bitcoin hit an all-time high of $69,000 in November. Since reaching this high, Bitcoin has dropped 45%. It is also interesting to look at Bitcoin’s price relative to gold, which has dropped to a seven-month low. One Bitcoin now only buys 19.9 ounces of gold. That rate peaked at 37 ounces in October.
Geopolitical uncertainty and inflation concerns have increased the claim to hold the yellow metal as a safe-haven. However, Bitcoin, which many refer to as gold 2.0, closely mirrored the performance of the US stock market as investors sought security elsewhere. John Roque, Head of Technical Strategy at 22V Research, underlines the following in a note:
In the world’s latest vortex (USA/Russia/Ukraine), Bitcoin, the asset that is claimed to be the answer to every question, has quietly weakened and is significantly stronger than its arch-enemy gold. shows poor performance.
When is the next bull market for Bitcoin?
Looking at Bitcoin against Gold, John Roque says the situation supports gold and shares his expectations:
We are looking for Bitcoin to return to $30,000 and then break there and wait for gold to hit an all-time high. We continue.
Some crypto experts don’t even expect a big rally until 2024. Du Jun, co-founder of crypto exchange Huobi, told CNBC this week that the next bull market in Bitcoin will come in just two years when the next ‘halving’ occurs:
After this cycle, 2024′ From the end of today to the beginning of 2025 we will be able to welcome the next bull market in Bitcoin.
Bitcoin’s limited supply and halving process is what makes massive price increases possible. Bitcoin halving occurs every four years and is when the reward for mining Bitcoin transactions is halved. This reduces the rate at which new Bitcoins enter circulation. The last Bitcoin halving was in May 2020.
Chris Vermeulen forecasts new record highs for gold
Analysts forecast further gains for gold above $1,900 if the situation in Ukraine continues to escalate. Daniel Briesemann’s forecasts are as follows:
If the Ukraine crisis escalates further, we believe gold will be in demand due to increased risk aversion. This means that its price will likely increase even more.
New record highs for gold are not overlooked either. Chris Vermeulen, chief market strategist at TheTechnicalTraders, predicts gold will rise to $2,700 in a year, then $7,400 in five years:
We’re entering a pretty big super cycle in precious metals. I think we started in 2019 and it’s been about a five year cycle for gold and a very tough year for stocks. We’ve had a very long bull market. We see commodities revive when the stock markets are late.
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