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HomeNewsBreaking: Bitcoin Plunges Below $63K! Find Out Why Investors are Rushing to...

Breaking: Bitcoin Plunges Below $63K! Find Out Why Investors are Rushing to Gold!

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  • Rising geopolitical tensions, particularly between Iran and Israel, contribute significantly to Bitcoin’s volatility and investor caution.
  • Gold sees increased buying as investors seek stability; Bitcoin struggles as risk asset amidst global political tensions.v

On Tuesday, the value of Bitcoin (BTC) dipped below the crucial $61,000 level, marking a broader downturn in the cryptocurrency market, which saw a reduction of nearly $200 billion in total market capitalization over the weekend.

This decline of Bitcoin’s recent performance, which reached a two-month high of $66,500 last Friday, fueling expectations for a robust final quarter of the year. However, the landscape has shifted due to escalating geopolitical tensions, particularly in the Middle East, posing risks to volatile crypto assets such as Bitcoin.

Market specialist Jeroen Blokland, who manages the Blokland Smart Multi-Asset Fund, has observed a trend where global investors are shifting their assets from Bitcoin to gold.

btc-gold
Source: Jeroen Blokland on X

This strategic reallocation is largely due to rising conflicts between Iran and Israel, prompting investors to seek refuge in gold, historically known for its stability in times of crisis.

Tensions escalated on Tuesday with reports of missiles launched from Iran towards Israel. In response, the White House issued warnings about an imminent Iranian ballistic missile attack on Israel, highlighting the seriousness of the geopolitical strife and its potential to destabilize regional security.

The U.S. administration has affirmed its support for Israel’s defensive measures and warned Iran of severe consequences if it proceeds with military actions. This geopolitical unease has contributed to the diminishing appeal of Bitcoin as a risk asset.

Amidst these developments, analysts have flagged concerns about Bitcoin being overbought following its nearly 5% increase in value leading up to September 27. This surge coincided with a uptick in net inflows into global crypto exchange-traded products (ETPs), reaching a peak since mid-July.

In particular, the net purchasing volume of U.S. Bitcoin ETFs last week amounted to 16,774 BTC, which surpassed the average monthly production rate of newly mined Bitcoin, approximately 13,500 BTC.

As usual, Peter Schiff  is highlighting the performance differences between physical gold and gold mining stocks. He notes that gold only needs to increase by 0.5% to reach a new record high, demonstrating its relative stability and the closeness to its peak price.

In contrast, the gold mining ETFs, $GDX and $GDXJ, need to rally by 5% to surpass their highs from the previous week.

This difference in required percentage gains illustrates how a minor decrease in gold prices can lead to a disproportionately larger correction in the prices of mining stocks.

Peter comments on the lack of enthusiasm in the market for gold, calling it “the least loved gold bull market ever,” suggesting that despite gold’s solid performance, the broader investor sentiment towards it remains tepid or indifferent.

However, this bullish trend faced a setback on Monday when Federal Reserve Chair Jerome Powell addressed investors, signaling a cautious approach to future rate cuts, as reported by CNBC.

Powell’s remarks underscored the Federal Reserve’s flexible policy stance, dependent on ongoing economic evaluations, which has introduced a level of caution among investors, contributing to the recent pullback in Bitcoin’s price.

The current price of Bitcoin (BTC) is $60,811.40, which is down 4.44% over the past few hours. The daily range is between $60,811.40 and $64,100.09, with a market cap of $1.202 trillion. The trading volume over the past 24 hours has been $46.3 billion.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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