Sorry Bitcoiners: Gold was the Only Safe Haven During the Evergrande Sell-off 


In recent years, several investors have weighed into the debate about what is the best safe haven asset between gold – the yellow metal – and Bitcoin (BTC). 

While many investors have chosen sides based on their personal sentiments, there have been very few events capable of affecting both assets at the same time that could tell which of them would be able to wither the storm during a strong financial crisis. 

The financial industry witnessed one of the most shocking developments last week that prompted the massive sell-off of various assets across various markets. 

The media was rife with reports Monday last week, when China’s second largest real estate developer, Evergrande Group, ran into trouble as the company missed interest payments for two of its lenders due to its ballooning debt. 

While the event may seem unrelated to both gold and Bitcoin, investors feared it could turn into China’s Lehman’s Brothers moment in 2008, one of the events that triggered the global financial crisis at the time. 

As a result of investors’ fears, all financial instruments, including gold and Bitcoin, experienced massive sell-offs. 

Gold Stands Tall Over Bitcoin

Despite the sell-offs, gold was able to wither the storm and preserve its value. Bitcoin, on the other hand, failed many traders as it shredded several percent of its value within hours. 

According to a Bloomberg stat, gold managed to exchange hands at a positive 0.56% during the hours of the panic sale, while Bitcoin plunged 8.54%, indicating that the yellow metal could be a better safe haven asset in troubled times. 

Gold vs Bitcoin Evergrande

(Source: Bloomberg, U.S. Global Investors)

Although Bitcoin outperforms gold in terms of returns, the precious metal has so far managed to stand tall over other assets irrespective of unfavorable economic conditions.   

Despite Bitcoin’s outstanding run since the beginning of the year, the world’s largest cryptocurrency has proven to be extremely volatile on several occasions. 

In June, Bitcoin suffered one of its biggest dips when China announced a crackdown on crypto-related activities. The cryptocurrency dipped nearly 50%, with billions of dollars liquidated and several traditional investors, including Jim Cramer, were forced to sell-off the asset

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