Over the past weekend, the price of PAXG, a digital asset backed by gold, peaked at a new record high. This occurred amidst rising tensions in the Middle East, leading some individuals to ponder if Bitcoin, frequently viewed as a hedge against geopolitical uncertainties, is a dependable choice in such situations.
On April 13, the value of PAXG reached a high of $2,855. Meanwhile, Bitcoin experienced a significant decline, dropping from approximately $67,500 to around $62,700 within a short time frame – a decrease of roughly 7.5%.
Bob Elliott, the co-founder and CEO of Unlimited Funds, as well as a former executive at Bridgewater, expressed his view that “Bitcoin should not be considered a tool for hedging against geopolitical risks.”
Bitcoin can be thought of as having various qualities, but it does not serve as a shield against geopolitical risks. Over the past few days, Bitcoin and PAXG, a gold-backed digital token, have moved in almost opposite directions on the charts. If anything, Bitcoin’s role as a hedge seems to be growing weaker.— Bob Elliott (@BobEUnlimited) April 14, 2024
Over the weekend, the already high tensions in the Middle East escalated even more with Iran’s use of drones and missiles against Israeli targets.
During the past weekend, Bitcoin (BTC) and PAX Gold token (PAXG) displayed an intriguing inverse connection: as Bitcoin increased in value, PAXG decreased, and when Bitcoin declined, PAXG rose. Yet, despite this seemingly linked pattern, PAXG failed to sustain its advance and retreated to its earlier price of roughly $2,376.
The value of PAXG has been steadily climbing since March, gaining approximately 20% as gold’s price hit a record high of $2,400 per ounce last week. However, it’s important to mention that PAXG’s trading volume is relatively low compared to other popular cryptocurrencies, with around $36 million exchanged daily.
Analyst Willy Woo stated that Bitcoin’s price recovery typically occurs within a short timeframe, and he brought up the impact of the Russia-Ukraine conflict on its market movements as well.
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2024-04-15 11:16