Bloomberg: “Crypto’s Hedge-Appeal Cracks as Gold Wins Big”

Bloomberg News, among the most trusted information sources for professional investors, has declared cryptocurrencies, and Bitcoin in particular, to  be failed hedges for investors.

President Trump’s October 10 threat to double tariffs on China triggered a collapse in the price of Bitcoin of more than12 percent, as well as a crash in prices of other cryptocurrencies and derivatives tied to crypto. “Nearly $19 billion in leveraged bets were wiped out in less than a day,” reported Bloomberg. “The rout left gold, once again, as the true haven in a world on edge.”

In spite of the violent volatility of cryptocurrencies and their magnetic appeal to fraudsters and scam artists, some investors have continued to sink money into the digital currencies and associated funds, seeking to hedge against the risks of inflation, excessive government spending, wobbly fiat currencies, and an overinflated stock market in the belief that crypto could function as a modern store of value.

“Then came a reminder of how fragile that promise remains,” declared Bloomberg. Gold broke through the $4,000 an ounce milestone to a new all-time record high on October 10, as investors fled to safety, while Bitcoin crumbled, “its supposed hedging role once again exposed as myth.” In the article titled, “Crypto’s Hedge-Appeal Cracks as Gold Wins Big on Debasement Fear,” Bloomberg concludes that Bitcoin is “a curious refuge that rallies when risk-taking is fashionable and falls when it fades.”

The fall in Bitcoin and other digital currencies accelerated, even after President Trump softened his rhetoric on China. By October 17, a week after the president’s initial threat, the valuation of all cryptocurrencies had plunged by more than $600 billion, according to CoinGecko, which tracks the crypto marketplace.

“This bitcoin bear market will be brutal,” proclaimed longtime gold advocate and investor Peter Schiff on the X social media platform, advising crypto holders, “sell your fool’s gold now and buy the real thing, or have fun going broke.”