Market Uncertainty Causes Metal Prices To Soar, Raising Questions About Cryptocurrency Value

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Market uncertainty has put gold on track to hit $2,000 an ounce on Monday, hitting levels not seen since August 2020. Palladium, another metal considered a hedge for inflation, hit an all-time high of $3,015 an ounce. Meanwhile, other metals such as silver and platinum hit six-month highs.


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“Further escalation is likely to lift prices further. The latter is likely to have a more lasting impact, as it could push the world economy towards a stagflation scenario, which we see very bullish for gold,” Julius Baer analyst Carsten Menke told Reuters.

Related: 5 Things You Need to Know Before You Invest in Cryptocurrencies

However, cryptocurrencies have not fared well despite being touted as a hedge for inflation. Bitcoin has fallen 4.45% over the past week, while Ethereum has fallen 7.21%.

Crypto pundits have offered different reasons for this, with explanations ranging from its lack of ubiquity to its position as a “stimulus asset”.

However, those under uncertain market conditions can seek refuge in crypto. According to Coindesk, Bitcoin price rose more than 14% on February 28 on expectations that Russia and Ukraine will use crypto to hedge against volatility in their fiat currencies.

“Last week’s relief rally stemmed from the idea that Russia (and others) could potentially become big buyers of BTC as an alternative reserve asset after the world could unanimously disconnect a country from the global monetary system almost overnight,” Quinn Thompson of Maple Finance told Coindesk.

Related: Bitcoin Drops Below $40,000 as Tensions Between Russia, Ukraine Rise

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