Peter Boockvar, well-known goldbug and bitcoin watcher, says BTC is an early warning for major events.
Traders are always watching the news and the markets for hints about where the price of different stocks and commodities will go. The currency markets are driven by rumours about interest rates, economic growth, and geopolitical unrest or uncertainty. Now, Peter Boockvar, a goldbug and exec from wealth advisory firm Bleakley Advisory Group, has added bitcoin to his list of early indicators.
Boockvar doesn’t hold bitcoin; he’s a card-carrying goldbug and, he says, would rather just buy that instead. But he has noted the correlation that bitcoin apparently has with gold, and is using that to inform his strategy. ‘I watch bitcoin as a signal, as an indicator, not because I want to own it as I’d rather own gold as an alternative currency,’ he told CNBC.
As a safe haven asset, gold is a key commodity to watch in the developing US-China trade war; if the world’s investors believe that this will be harmful to economic growth, they will pull money out of stocks and put it into gold as a hedge. And bitcoin, says Boockvar, is a good early warning for gold itself.
‘Over the last couple of weeks, we’ve seen this sharp rise in bitcoin and to me that was saying something in terms of what markets were thinking, about what the Fed was going to do, the turmoil created by the threatened tariffs,’ he explains.
Bitcoin has always been used by a minority of traders to park funds in times of trouble – fulfilling its reputation as digital gold – and to circumvent capital controls, most notably in China. But Boockvar’s analysis suggests that it is now used widely enough to factor into traders’ broader decisions, sending hints about where the market is heading.
In other words, bitcoin acts as a kind of hypersensitive warning signal for the markets – the ultimate canary in the coal mine when it comes to economic slowdown, downturn or recession.
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