Bitcoin Outperforms Gold and Stocks Amid Global Turmoil
The escalation of conflict in the Middle East is triggering uncertainty in the global financial markets. Amid these conditions, Bitcoin is showing resilience with a rise of around 12% over the last 60 days and is trading in the range of US$70,000-US$71,000 as of Tuesday (24/3).
In contrast, the S&P 500 index has fallen by about 4%. Gold prices have corrected by up to 16% and recorded the largest decline since 1983, reaching around US$4,400 per troy ounce. This situation is driving increased investor attention towards Bitcoin as an alternative hedge amid market turmoil.
Responding to these market dynamics, Indodax Vice President Antony Kusuma explained that Bitcoin’s strong performance during crises is not a new phenomenon, but a pattern seen in events such as the COVID-19 pandemic crisis, the 2020 US-Iran tensions, and the Russia-Ukraine conflict.
“The decentralised characteristics of Bitcoin, its 24-hour tradability, and independence from conventional banking systems make it relevant amid disruptions to financial stability due to geopolitical conflicts. This positions Bitcoin with practical functions as well as potential as an alternative hedge,” Antony stated.
JPMorgan’s Head of Metals Strategy, Greg Shearer, noted that the decline in gold prices is triggered by sell-off actions amid the surge in oil prices due to the Middle East conflict, which is raising inflation concerns. This pressure is also driven by the strengthening US dollar and rising bond yields, making gold less attractive compared to yield-generating assets and potentially altering central banks’ gold purchasing patterns.
On the other hand, tensions in the Middle East impacting global energy distribution routes in the Strait of Hormuz are increasing inflation risks due to soaring oil prices. This condition is fostering expectations that the Fed will maintain high interest rates for longer. In such circumstances, gold, which does not provide regular yields, tends to lose appeal, particularly for institutional investors.
Nevertheless, the crypto market remains in a volatile phase with cautious sentiment. Macroeconomic factors such as inflation and interest rate policies will continue to determine future price movements. Therefore, investors are advised to maintain risk management and comprehensively understand market dynamics before making investment decisions.
As a trusted cryptocurrency asset trading platform in Indonesia, Indodax continues to commit to providing safe, transparent, and accessible services to the public. It also regularly publishes Proof of Reserves (PoR) data accessible to the public on CoinMarketCap and actively promotes literacy and education so that the public can invest in crypto assets wisely and responsibly.