After a prolonged correction, Bitcoin is back big time. The “people’s currency” gained close to 7% this week, stabilizing around the $11,000 mark.
Is this comeback for real?
Hard to say, as there are hardly any “fundamentals” to judge whether Bitcoin is undervalued or overvalued at these levels. Still, there are a couple of bullish signs for the digital currency worth noticing.
One of them is that Bitcoin is beginning to behave like the ‘new gold,’ shining in times of extreme uncertainty that take over Wall Street.
There was a time when gold would shine as Wall Street faltered. That was long time ago, when it was the hedge against uncertainty. It was the asset where investors could park their cash in times of political and economic turmoil.
Now Bitcoin is taking its place, as evidenced by the performance of the two assets overtime.
Bitcoin, for instance, rallied last week, as conventional gold and stocks faltered, due to anxiety over the direction of interest rates and world trade. The “people’s currency” gained 13.95% in early in the week and 22.81% in the last 30 days. Meanwhile, the SPDR Gold Trust lost 2.31% and 2.51% over the same period, and the S&P500 lost 3.53% and 4.93%.
Bitcoin displayed a similar pattern last year. It rallied as North Korean dictator Kim Jong-un was launching missiles over Japan, and as China was trying to write its own navigation rules in South China Sea.