- Bitcoin has rallied 8% while Gold has fallen 18% since the onset of Operation Epic Fury on February 28.
- The divergence means bitcoin now buys 32% more gold than it did at the start of the conflict.
- The SPDR Gold Shares ETF recorded a record $4.2 billion in weekly outflows as the precious metal had its worst week since 1983.
Since the U.S. authorized the bombing of Iran in support of Israel on February 28, cryptocurrency markets have witnessed a stark divergence from traditional safe havens. Bitcoin surged 8% to reach $70,700, while gold tumbled 18% to $4,300 per ounce over the same period.
Consequently, investors who purchased gold as war insurance watched their holdings lose a fifth of its value in just four weeks. Gold’s initial spike higher reversed hard after a fakeout move at the conflict’s start. Meanwhile, rising U.S. Treasury yields and a strengthening dollar exerted further downward pressure on the precious metal.
The sizable SPDR Gold Shares ETF hemorrhaged $4.2 billion in the war’s first week, a historic weekly outflow. Investors pulled 25 tonnes of physical gold backing from the world’s largest gold ETF within that seven-day stretch.
However, bitcoin absorbed the same geopolitical shock and maintained its gains, even outperforming the S&P 500 Index, which fell over 3%. This performance came after Bridgewater Associates founder Ray Dalio advised that central banks would never want to buy BTC, claiming “There is only one gold.” Gold has dropped more than 15% since his March 3 prediction.
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