Bitcoin vs. Gold

Bitcoin vs. Gold

That was quick!

Late last week I thought most investors were too scared to buy the dip. Boy, was I wrong…

Traders are gobbling up stocks, pushing the major averages higher for five days in a row. Eager buyers have all but erased the market’s double-digit pullback. As of this morning, the Dow, S&P 500, and Nasdaq Composite are all back above their respective 50-day moving averages. The UK’s FTSE is also rebounding strongly.

Futures are up once again this morning. If the gains hold to the closing bell, MarketWatch reminds us that we’ll clock the best weekly performance stocks have seen in more than a year.

Reasons to be optimistic perhaps. Who really knows? Volatility rules the roost here.

It is the gold and crypto markets however, that seem to be rising in the shadow of stock volatility.

Here’s an update on where both markets are at…

Is this Bitcoin comeback the real deal?

Thanks to the return of volatility in the stock market, Bitcoin and other cryptocurrencies have completely fallen off the financial media’s radar.

After being chopped in half, Bitcoin quietly bottomed out in early February and began its comeback journey. It is now up more than 60% off its recent lows and is consolidating just over $10,000.

  Click to enlarge

The parabolic rise we witnessed in Bitcoin during the fourth quarter was unsustainable. But the crypto faithful are quick to remind us that Bitcoin has endured more than a handful of crashes during its short existence. Each time, Bitcoin has recovered and pushed to new highs.

Is this time different?

Gold pushes higher

Stocks aren’t the only asset class pushing higher this week. Precious metals are also perking up. Gold exploded higher on Wednesday and made a run at its January highs near $1,360 as the dollar retreated toward 3-year lows…

  Click to enlarge

We don’t have to search far to find a catalyst for gold’s sharp bounce.

Remember, the U.S. dollar is now off to its worst start of the year since 1987. And it doesn’t look like it’s going to recover anytime soon.

A breakout here could boost gold to prices we haven’t seen in more than four years. With the threat of inflation growing and the dollar tumbling, conditions are ripe for an extended rally in precious metals.