Gold beat rival Bitcoin on Wednesday , as trade talks between the United States and China seemed to come to a standstill .
President Donald Trump threatened Tuesday to impose more tariffs on Chinese products, a measure that could frustrate the White House’s plans for a “phase one agreement,” Cryptocurrency said .
Investors took Trump’s words as a signal to get out of risky assets, which caused falls in Dow Jones, Nasdaq and S&P 500. Instead, they increased shelter assets, sending the yield on Treasury bonds to 10. years to 1,751% from 1,784% on Tuesday.
At the same time, the sentiment of coverage helped gold to rise to 0.5%, to establish an intraday high of US $ 1,478,739 per ounce .
Bitcoin without being moved by the commercial situation
Meanwhile, investors kept a safe distance from Bitcoin . During Wednesday’s session, the exchange rate from BTC to dollar fell 0.4%. The downward movement extended the weekly losses of the pair to 4.8%. On a monthly scale, it decreased 11.70% in the US-based Coinbase exchange.
But analysts believe that cryptocurrency is simply neutralizing its long-term bias, after increasing earlier this year. The pseudonym trader Bitcoin Jack sees the cryptocurrency inside a big rising parable, an indicator that determines the direction and possible investment of an asset.
The analyst tweeted Tuesday that the price could fall as low as $ 5,000 , adding:
Many also see that Bitcoin loses its negative correlation with the commercial situation between the United States and China and is more likely to behave as a risky asset. The downward correction of 45% of the cryptocurrency from its annual maximum close to US $ 14,000 has led Fundstrat co-founder Tom Lee to match it with US stocks.
In September, Lee said that BTC is not a safe haven like gold. Instead, it falls more into the category of the S&P 500 index .
Trade talks between the United States and China are now stagnant. While Trump says that Pekin is trying to buy a large amount of US agricultural products, his threat to impose tariffs exposes the real conflict.
So far, the Asian giant has not specified the amount of agricultural products it plans to buy from Washington. Trump alone says the nation has committed to buy up to $ 50 billion in agricultural products per year.
The chicken and egg situation seeks to create a more confusing perspective for the global economy . Therefore, investors are more likely to protect themselves from safe assets than risky actions. On the other hand, if Trump manages to squeeze another Federal Reserve rate cut this year, it would give the stock a short-term relief, which could also benefit Bitcoin .
Until then, cryptocurrency remains a very speculative investment vehicle for everyone and, therefore, unattractive. Only investors with a great appetite for risk would venture into it.