Bitcoin’s spectacular new-year rally finally fizzled out this week as the volatile cryptocurrency price fell 17%. That’s the biggest drop since March.
Compared with the massive rally Bitcoin-USD (BTC-USD) has seen (up to as high as $34,000), the losses aren’t all surprising.
The volatility and drastic fluctuations highlight an important note for the most famous cryptocurrency: It is an opportunistic, emerging trade. But at the end of the day, it will always pose risks.
Bitcoin has loose monetary conditions where hedge funds have the ability to extract the supply of the coin out of popular exchanges to manipulate prices. On top of this, Bitcoin can never be “money” as it has no sovereign backing. It is a speculative trading vehicle.
However, gold has something that is the opposite of Bitcoin. It has history and legacy.
The precious metals price rose to its highest in nearly two months on Monday. If the price gets to $1,970, then we could be looking at a breakout.
With the uncertainty in the stock market as COVID-19 cases keep ramping and the slide of the U.S. dollar, should you be looking to trade the new-school, fast-rising Bitcoin or the old-school, traditional gold?
Watch my full interview with Midas Letter founder and other WealthPress traders to find out now!