Bitcoin price jumped to $7,236 on Thursday, recording more than 14% gains. The stock market also jumped today, with the S&P 500 up 1.65% and Dow edging higher by 1.52%. Gold also spiked 2.76% to $1,635.30 per ounce.
These gains came on the back of the surge recorded by oil which jumped a whopping 24%. Extreme oil moves impacted stock indices which spilled into Bitcoin, said economist and trader Alex Kruger.
“Under normal circumstances crude oil does not impact broader markets. But nothing about current circumstances is normal,” said Kruger.
Oil rose on the back of US President Donald Trump’s tweet that he has spoken with his “friend” MBS, Crown Prince of Saudi Arabia who spoke with Russian President Vladimir Putin to cut back on about 10 million oil barrels supply.
These gains in the broad markets have been recorded despite the worldwide COVID-19 cases crossing 1 million and deaths 50,000.
The fear of global sell-offs eased despite the new data showing that 6.6 million Americans filed for unemployment benefits last week, amounting to a total of nearly 10 million such unprecedented claims in the just two weeks.
Bitcoin extended its gains from yesterday when it added $500 while the Dow, S&P 500, and Nasdaq Composite all finished 4.4% lower on Wednesday.
In the first quarter of 2020, Bitcoin surpassed the stock market performance which it has been following and reaching the highest correlation point with.
In the first three months of the year, the Dow had its worst first-quarter ever with negative 23% returns. S&P 500 also had its worst first quarter with 20% losses. Bitcoin meanwhile was down 11.49%.
However, a shift might be taking place for bitcoin as Vijay Ayyar, head of business development at crypto exchange Luno said, “Bitcoin is still a relatively smaller asset class that is increasingly uncorrelated to traditional asset classes and this is in the process of being established as we speak. This is why I believe the current market environment is a big test for Bitcoin and given how young the asset class is, it has actually held up quite well.”
He pointed out that gold is an established safe haven asset but bitcoin is “arguably a second choice at this point” given its small user base which continues to grow.
In the quarter first, gold prices rose by 4%.
In the current environment where banks are printing money like crazy, Robert Kiyosaki, author of ‘Rich Dad Poor Dad’ said, Bitcoin and gold are the best choices.
However, according to Bitcoin proponent Max Keiser, people will “flock en masse” to bitcoin because of no gold for sale due to the “unprecedented turmoil” sparked by coronavirus shut down.
“I predict — and this is not only the ultimate use case but the ultimate irony — that once people realize that they cannot get gold, they’ll start flocking en masse into Bitcoin,” said Keiser.
The world’s leading cryptocurrency is meanwhile preparing for the upcoming halving which is just over a month away. This “‘quantitative-hardening’ program,” is unlike central banks’ unpredictable inflation and money creation.
With the money growing on trees, as central banks print money, Mike Novogratz, CEO of Galaxy Digital calls to “Buy BTC.”