The volatility of the markets in August 2024 has shown, once again, that reality is stubborn and the safe haven par excellence is gold. Bitcoin is the most well-known and safest cryptocurrency out there, and has generated huge gains in recent years, but when panic hits Bitcoin seems to follow the market trend while gold appreciates.

There are those who say that Bitcoin is digital gold. It’s a way of saying that Bitcoin is very secure, and it is. But the truth is that only gold is gold and, this August, it has become very clear. Last week, gold again broke another historical record, reaching 2,531 dollars per ounce, that is, around 80 euros per gram. Currently, the rise has corrected slightly, but everything indicates that it will continue to rise, and it has already done so by almost 17% so far this year. What is happening?

Bitcoin, digital gold?

Between the 4th and 5th of August, the international markets suffered a shock that caused immense losses in many assets. Bitcoin had, in those days, a behaviour similar to high-risk capital values, that is, it went down following the market. The World Gold Council has analysed the evolution of assets in those days, very specifically comparing gold and Bitcoin. And the conclusion is strong: it is very volatile. Therefore, nothing digital gold because Bitcoin does not (apparently) have one of the essential conditions to be considered a safe haven value: being able to withstand market turbulence. It’s a great asset for big gains, it’s been proven for a long time, but it doesn’t work as a safe haven.

In the same period, and throughout the month of August, gold has been revalued. Because, historically, gold gains value in difficult times. When everything is volatile, physical gold is always there. This is what the American financier Michael Burry, famous for having predicted the subprime mortgage crisis of 2008, must have thought. On August 4, seeing how the markets were evolving, Burry made a large purchase of gold. This fact put the whole market on alert and pushed the price up.

Will the recession come?

Gold has continued to rise due to the possible rate cut by the American Federal Reserve, which could put the world’s first economy into recession. It’s a long-announced recession that never seems to end. At the moment, gold continues to gain value, that is to say, big investors are preparing for the curves.

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