Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
For thousands of years, gold has symbolized wealth and currency, serving as a reliable store of value. In today’s complex and uncertain economic environment, gold remains the go-to safe haven for investors. However, since the advent of Bitcoin, many have dubbed this cryptocurrency as “digital gold,” suggesting that this emerging asset also exhibits safe-haven qualities.
The debate over whether Bitcoin or gold is the true safe haven has been contentious, with opposing views. Recently, the escalation in Middle East tensions highlighted a key point: gold remains the true safe haven asset. The reason is straightforward: while Bitcoin’s price plunged, gold prices surged.
On Tuesday, Iran launched approximately 200 ballistic missiles at Israel, escalating geopolitical tensions. In response, Israeli Prime Minister Netanyahu pledged a strong counterstrike. Bitcoin (BTC) reacted sharply, recording its largest decline in over a month, with intraday losses reaching as much as 6%. Simultaneously, U.S.-listed Bitcoin ETFs saw outflows totaling $242.6 million, the largest since early September, with trading volumes hitting $2.53 billion, the highest since late August.
In contrast, when reports surfaced about Iran potentially attacking Israel, gold prices skyrocketed. This price movement confirmed what many analysts have consistently believed about Bitcoin: it behaves more like a speculative risk asset, akin to popular tech stocks, rather than a true safe haven. Over the past five years, Bitcoin has shown a high correlation with the Nasdaq 100 Index, with a coefficient of 0.88 (on a scale where 1 indicates perfect correlation), emphasizing their strong linkage.
Moreover, this is not an isolated incident. In similar scenarios during October 2023 and April of this year, both gold and Bitcoin displayed similar trajectories.
Evidence suggests that during times of geopolitical crisis, Bitcoin behaves more like a speculative asset, lacking the stability essential for a true safe haven. If Bitcoin cannot perform as a safe haven, it should not be labeled “digital gold.” In other words, Bitcoin may participate in market rallies with other risk assets during good times, but it experiences significant volatility when crises hit.
Some analysts, however, argue that comparing gold and Bitcoin as safe havens is akin to comparing apples to oranges, as they cater to different investor needs. People purchase Bitcoin to counteract central banks and uncontrolled currency printing, while buying gold is a hedge against geopolitical risks. In fact, these two assets have similarities in many ways, such as being forms of money free from government interference and having limited supply, which is why both Bitcoin and gold have protected investors over the past year.
