The CEO of the Chicago Mercantile Exchange (CME) Group, Terry Duffy, said people are “using Bitcoin a lot like they’re using gold” in the sense that investors buy both gold and Bitcoin (BTC) as a safe haven asset during times of economic trouble.
Duffy said this in response to a question regarding the Bitcoin (BTC) rally since the beginning of the year. Indeed, since mid-December, Bitcoin (BTC) has risen from $6,800 to $9,800, which is a price increase of 44%, and a rally by any definition.
This Bitcoin (BTC) rally has occurred at a time of economic uncertainty and volatility, due to fears over the Coronavirus slowing the global economy. The Dow Jones Industrial Average (DJIA) has seen really bad days, ranging from 600 points down, to really bullish days with rallies over 400 points. This is reminiscent of the stock market’s behavior during the beginning of the 2008 Great Recession.
Like Bitcoin (BTC), gold has also risen substantially since mid-December in response to the economic uncertainty, from $1,460 an ounce to $1,560 an ounce, a gain of 7%.
An argument could be made that Bitcoin (BTC) is a better performing safe-haven asset than gold. Both gold and Bitcoin (BTC) seem to gain value during times of economic uncertainty, but Bitcoin (BTC) seems to gain value far faster.