Bitcoin Stumbles as Gold Becomes the Ultimate Safe Haven

- Gold rises 10.5% so far this year, while Bitcoin increases only 2.4% - US interest rate policy and geopolitical risks driving gold prices up [Unblock Media] The global economy is swaying amid uncertainties and geopolitical risks, showing contrasting performances in the markets for gold and Bitcoin. As investors gravitate towards safe assets, gold continues to rise, whereas Bitcoin is showing relatively sluggish performance. This year, gold has recorded an annual rise of 10.5%, the highest return among major investment assets. Gold futures prices started at $2,666 per troy ounce at the beginning of the year and are currently nearing $3,000. This upward trend is a result of increased preference for safe assets amid expanding global economic uncertainties and geopolitical risks. Notably, the US Federal Reserve's interest rate policy and inflation concerns are key factors driving up gold prices. Additionally, heightened geopolitical tensions in the Middle East are also promoting demand for gold. Recent conflicts between Iran and Israel, military clashes in the Red Sea region, and uncertainties in oil supply have led investors to seek safer assets, thereby pushing up gold prices. In contrast, Bitcoin has only increased by 2.4% from ₩142,320,000 at the start of the year. This is even lower than the rise in the won-dollar exchange rate (2.91%) over the same period. Although there was a temporary surge following former President Donald Trump's nomination as the Republican candidate, its prices have recently stagnated. Several major factors contribute to Bitcoin's sluggish growth. Firstly, the recent tightening of global cryptocurrency regulations has dampened market investment sentiment. Moreover, decreased interest from institutional investors and lack of liquidity are limiting Bitcoin's price increase. Additionally, rising global economic uncertainties have reduced preference for risky assets. Meanwhile, Federal Reserve Chairman Jerome Powell recently stated in an interview with CNBC, "Bitcoin is just like gold, except it’s digital." This remark suggests that Bitcoin could serve a similar role to gold as a store of value, reinforcing its position as a potential alternative asset in the market. Traditionally, gold and Bitcoin have been recognized by investors as safe and alternative assets, respectively. Typically, gold increases during times of economic uncertainty, while Bitcoin tends to be more volatile. This pattern is evident in the current scenario, underscoring the need for investors to consider these market trends when adjusting their portfolios. Experts predict that the contrasting movements of gold and Bitcoin are likely to persist. If the global economy becomes more unstable, gold's strength is expected to continue, whereas Bitcoin might experience sluggish movement in the short term. However, in the long term, changes in government policies and movements of institutional investors could facilitate Bitcoin's recovery potential.