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- Global equity markets are exploding today on news that a vaccine that would end the ongoing pandemic is 90% effective
- This news signals that it may only take months for things to return to normal, which means reduced government spending and economic turmoil.
- Of course, this is a bad thing for safe-haven assets, with today’s news sending the price of gold swooping
- Bitcoin has also seen some downward momentum, although it is mostly consolidating around the price it had been at in recent days.
- If BTC is indeed a safe haven asset that trades more like gold than stocks, then this news could seriously affect its strength.
Bitcoin is still trading in the mid $ 15,000 region after a period of weakness over the past two days.
After the $ 16,000 rejection, the bears plunged the price to lows of $ 14,400. At this point, he was able to reverse his descent and rally to the region above $ 15,000.
It has since consolidated and may now be on track to see its volatility begin to rise as global markets begin to move based on the vaccine news.
News on vaccines makes stocks fly; Strikes Blow to Gold and Bitcoin
News of Pfizer’s highly effective vaccine has moved markets, sending stocks soaring as safe-haven assets trend lower.
While all benchmark equity indices rallied by multiple percentage points during pre-market trading hours, the price of gold plummeted, seeing one of the last one-day selloffs it has seen in some time. .
Bitcoin has shown signs of correlation to both stocks and gold on separate occasions, making it unclear how this news could impact its price action. Today it has decreased slightly.
Trader: vaccine news possibly harmful to “store of value” tales
A trader covered his long exposure to Bitcoin after the news broke, noting which could prove highly negative for safe haven narratives.
“Short hedged my 1: 1 BTC on vaccine news. Gold has been dumped so much that it makes me think it’s bad for value narratives. Not net short just protected for spot exposure.”
Image Courtesy of SalsaTekila. Source: Assorted Charts from TradingView.
The next few days should shed some light that Bitcoin’s independent technical strength will be enough to dodge the impacts of this news.
Featured image from Unsplash. Charts from TradingView.
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