{"id":388697,"date":"2019-07-04T16:20:07","date_gmt":"2019-07-04T16:20:07","guid":{"rendered":"https:\/\/wncen.com\/?p=388697"},"modified":"2024-06-11T13:45:02","modified_gmt":"2024-06-11T13:45:02","slug":"bitcoin-traps-golds-market-share-as-sovereign-bonds-become-unattractive","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-traps-golds-market-share-as-sovereign-bonds-become-unattractive\/","title":{"rendered":"Bitcoin Traps Gold’s Market Share as Sovereign Bonds Become Unattractive"},"content":{"rendered":"

Bitcoin’s revival is considered to be Facebook’s Libra<\/a> doing. The social media’s giant sudden foray into the cryptocurrency industry gave bitcoin, as many believe, a perfect reason to grow its valuation.<\/p>\n

That is until one considers a simultaneous price rally that took place in the gold market. Bitcoin’s rise above the $13,000 level has only one potential link to the yellow metal’s ascent above $1,400 an ounce: a weaker US dollar sentiment.<\/p>\n

\"bitcoin,<\/a>
Bitcoin has Recovered by More than 275% Since Its Bounce Back from the $3,120 Level | Image Credits: TradingView.com<\/figcaption><\/figure>\n

Gold, Bitcoin against US Dollar<\/h2>\n

The trouble in the American greenback started with politically-influenced overborrowing. President Donald Trump’s massive tax cut of $1.5 trillion in 2017, followed by his pressure on the Federal Reserve to keep the interest rates steady burdened the US with a $22 trillion debt and $1 trillion in annual deficits. Ahead of the 2020 presidential elections, President Trump is hinting more tax cuts. Atop that, the Fed has declared<\/a> that it is going to cut rates in July.<\/p>\n

The impact is already out in the open. The US dollar on Thursday drifted further away from its highs, although the index recovered from its three-month lows of 95.843 in June. Waning sentiments for a resolution in the ongoing US-China trade war is also hurting the dollar sentiment.<\/p>\n

\u201cEveryone from the Reserve Bank of Australia to the Fed is talking about\u00a0inflation disappointing to the downside,\u201d Mayank Mishra, Singapore-based\u00a0macro strategist at Standard Chartered, told<\/a> CNBC. \u201cThe Fed arguably has more room to ease\u00a0than anyone else. That, in theory, should lead to a weaker dollar.\u201d<\/p><\/blockquote>\n

<\/iframe><\/div>\n

The dwindling sentiment in the greenback market is lending credibility to both traditional and modern safe-haven assets, including bitcoin and gold.<\/p>\n

Holger Zschaepitz, the financial correspondent at WELT, a Berlin-based financial news service, noted that the cryptocurrency had passed the digital divide towards the yellow metal. He said on Thursday:<\/p>\n

“Bitcoin gaining traction as store-of-value and digital gold in this crazy politicized central bank world with negative or lower for longer low rates. Digital currency passes digital divide toward Gold. Both assets reached key thresholds in June, $10k & $1,400, now trade in tandem.”<\/p><\/blockquote>\n

\n

#Bitcoin<\/a> gaining traction as store-of-value and digital #Gold<\/a> in this crazy politicized Central Bank world w\/negative or lower for longer low rates. Digital currency passes digital divide toward Gold. Both assets reached key thresholds in Jun, $10k & $1,400, now trade in tandem. pic.twitter.com\/vrwzJlWsHl<\/a><\/p>\n

— Holger Zschaepitz (@Schuldensuehner) July 4, 2019<\/a><\/p><\/blockquote>\n