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Bitcoin’s ‘digital gold’ narrative unravels as Russian invades – ‘When sh*t hits the fan, there’s only one gold’
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Who wants “digital gold 2.0” when you can get the real thing?
Bitcoin plunged to a one-month low yesterday afternoon as explosions racked Kyiv, while gold rose to its highest level since last June.
Narrative Violation :
Digital Gold vs. Actual #gold —— As military action starts.
#RussiaUkraineConflict #Bitcoin pic.twitter.com/FFKRrzKBVB
— Ashish Anand (🌾,💸) (@CryptFyn) February 24, 2022
Late Thursday afternoon, Bitcoin had plummeted 7.6 per cent to briefly trade under US$35,000 for the first time since January 24, while gold had risen 1.7 per cent to an eight-month high of US$1,930.
“Digital gold they said. The perfect hedge they said. $BTC rugging harder than the stock market. Rekt again. Oh well…” tweeted @rgr_park, who describes himself as the “ultimate rekt pleb”.
Others analyts on social media were also noting that BTC was also trading as a risk asset, rather than a safe haven from geopolitical crises.
Gold +2%
Bitcoin “digital gold” -8%As Russia unprovokedly attacks Ukraine
When shit hits the fan, there’s only one gold
— Quoth the Raven (@QTRResearch) February 24, 2022
Bitcoin is very clearly not digital gold.
It is, in fact, trading as a risk asset.
— RJR Capital (@RJRCapital) February 24, 2022
god, I don’t want to make light of this huge tragedy, but you know how gold is going up right now? “Digital gold” is down
— Mike (@100Percent_Mike) February 24, 2022
Overall the crypto market was down 8.0 per cent, with Ethereum falling 10.3 per cent to US$2,376. Meanwhile the ASX200 had dropped 2.9 per cent and the S&P/ASX All Technologies Index fell 5.1 per cent.
“What we’re seeing in the equity market is going into crypto as well, that’s for sure,” said Saxo Markets Australian market analyst Jessica Amir.
The ASX is now somewhat tied to the price of BTC, Amir noted. Jack Dorsey’s Block (ASX:SQ2) is the ninth-largest company on the ASX following its acquisition of Afterpay, and it makes half of its revenue from Bitcoin trading, she said.
“Equities have typically fallen five per cent on political tension, but there’s so many things going on in equities right now,” such as the looming interest rate hikes and the possibility of a nuclear deal with Iran potentially bringing 1.3 million barrels a day of Iranian oil back onto the market.
“We’ll just have to wait and see what happens next,” Amir said, adding that she doesn’t think bottom-buyers will come onto the market with so much uncertainty at the moment.
“I think risk-off will remain for some time. and that doesn’t bode well for tech, and that doesn’t bode well for the whole crypto space.
People think to think, calm down and wait and see, pause and reflect.”
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