As the new year dawned, missiles and drones fell in the Middle East, war tensions jumped and investors turned to “safe havens” to protect assets and find speculative alpha. During this time, gold – the traditional port in a storm – responded strongly; low-yielding US Treasuries did not.
Bitcoin, however, did grab attention, often looking and acting like a safe haven asset. But has it achieved this vaunted global role? Let’s look closer.
Even Elon Musk got in on the fun last week, tweeting that “Bitcoin is not my safe word.
As 2020 kicked-in, The Wall Street Journal reported that gold “jumped to its highest level in almost seven years with tensions between U.S. and Iran escalating, the latest example of investors favoring the safe-haven metal to protect against a market downturn.” The article went on to cite CFTC data showing hedge funds and other speculators ramped up bets on gold prices for the third consecutive week, to the highest level in months.
