Crypto Kids vs Gold Nomads
In Q4 2017 Bitcoin rose parabolically from $2972 up to all time highs at $19458.
During the same period Gold dropped from $1372 to the $1240 level.
Bitcoin has since dropped 50% to sub $10000. Yet Gold is heading higher towards its September 2017 highs.
I’m not sure the Crypto Kids use stops?
Check out the two daily charts to get a gauge on price action.
It’s not the first time we’ve seen this type of divergence occurring between the old school alternate currency, and the new kid on the block(chain).
There are so many other variables to consider though, especially with Gold price fluctuations.
Many suggest Gold has suffered from a buoyant U.S stock market after the VIX Volatility Index (Wall Street’s Fear Gauge) dropping below 10. A lack of investor fear generally means a disinterest in safe haven investments like Gold.
Yet since December, Gold has been on the bid, rising in unison with US stock market.
We have been witnessing an exceptionally weak U.S Dollar though, which does often trade inversely to Gold and positive for stocks.
Yet as alternate currencies go, it may prove to be the personalities, their associated risk profiles, and the psychology of the punters trading Cryptos vs Gold that are the main factors dominating price action.
In one corner we have Gen-Y Millennials who are familiar with digital technologies, blockchains and crypto code systems. A generation embracing risk, wild adrenaline fueled roller coaster rides yet snubbing traditional, regulated constructs such as stocks and gold.
In the other corner. The old school brigade trade a traditional commodity that has been around since Biblical times, and has been used as a store of wealth for many thousands of years.
It’s too early to establish if we have divergences appearing between Gold and Crypto price charts.
Yet one thing is for sure…
There are large divergences between the personalities of those that trade them.
2018 is going to be a dynamic and eventful year in this space. Whether it all ends in tears or not remains to be seen. Yet whichever way the Crypto Currency drops, there are going to be plenty of lessons learnt across the board.
Gold and Bitcoin are a part of The Chartist’s regular Global Chart Research reviews.
