The world of finances has been hit hard in the last week. All major markets are in the red. That is, including our beloved Bitcoin. This has week-long ignited fears of a financial crisis. But during this bear phase, one asset has been performing well, gold. Gold and a number of other metals have been in the green for much of the week.
Today, however, most metals have taken a big hit. Gold has joined the drop, marking one of its worst days since 2013.
Resemblance To The 2009 Financial Crisis
The latest drop has reignited a fear that the world is about to experience a financial crisis like seen in 2009. Already, the stock market is down. This week saw it mark the worst drop since 2009. Bonds yields around the world are also in their worst run in ten years.
Stock market down ?
Crypto market down ?
Gold/Silver market down ?
Oil prices down ?
Bond yields down ?
— Mr. Whale ? (@cryptowhale) February 28, 2020
The crypto market and oil have also faced the same fate. Gold, which is considered a safe haven asset has been the only commodity enjoying a good return. Prior to today’s crash, the metal was enjoying a return of 6.5% since the turn of the year.
BREAKING NEWS: The stock market
has its worst drop since the 2008 financial crisis.
S&P 500, which tracks large U.S. stocks, down -20%.
Dow Jones falls 16%, its worst drop in history, crashing for a 5th day straight.
THIS IS 2008 CRISIS ALL OVER AGAIN, but much worse! ?
— Billy (@bitbillyy) February 28, 2020
Today’s crash has however wiped off the narrative that it is a safe haven, at least not this time. Like Bitcoin a few days ago, its crash today will see some question its status as a safe-haven asset.
Shall we pull a @PeterSchiff and start talking about how terrible this asset's performance is, and how it's not a safe haven, based on 2 trading days, despite great performance over the prior months? https://t.co/8TZIx2rKsh
— Dan McArdle (@robustus) February 28, 2020
More importantly, it has strongly signaled a financial crisis. Analysts have been pointing out that just like in 2009, all commodities are going down.
In cases of economic downturns, everything drops. Similar with 2008. Gold corrected with the equity markets in a tandem.
After that, it outperformed the equities in 2009-2011. https://t.co/KoIsKEHFmR
— Crypto Michaël (@CryptoMichNL) February 28, 2020
The recent market crash has as we have extensively covered, been caused by the Coronavirus. The epidemic has hit the financial world as it disrupts the world’s biggest economies, i.e China and the U.S.
Is It Too Late For Bitcoin?
Of course, back in 2009, Bitcoin was not in play. It is the financial events that took place at that time that saw its birth. So, it was specifically designed for what is coming in the next few months. Though so far it has failed to behave the way many expect, rally, there is plenty to come. As we reported yesterday, there is pressure on the FED to cut rates, but this remains since the full impact of the Coronavirus remains unknown.
As more light is shed on this, it’s expected that the financial world will continue to shake and we see Bitcoin rise.