How Gold And Bitcoin Have Performed With The Russia-Ukraine Conflict?

Bitcoin and gold are going head to head in performance in light of the recent crisis between Russia and Ukraine. As the conflict continues, financial markets have been hit hard. Russia saw more than 45% of its stock market crash and other financial markets also saw falling prices. Bitcoin was not spared from this attack. However, gold has thrived in this environment, raising the question of which asset is the better inflation hedge?

Gold outperforms as Russia invades Ukraine

On Thursday, February 24, the world watched in horror as Russia embarked on the early stages of its invasion of Ukraine. The latter, clearly of less military strength, saw several parts of his country bombarded by the Russian forces. But elsewhere on the charts, bitcoin and gold had struggles of their own as investors watched with bated breath.

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Bitcoin has emerged as the “digital gold” in recent years, giving its physical counterpart a run for its money. Year after year, bitcoin outperformed bitcoin and investors flocked to the digital asset as the new dominant inflation hedge. However, as the news of the Russian invasion spread around the world, the digital asset did not meet much resistance as it started to collapse very quickly.

Gold used this time to show that it is a strong contender to be a powerful hedge. While its digital competitor was down Thursday, gold had risen on the charts, and fast, too.

Gold outperforms BTC after Russia invades Ukraine | Source: Twitter

The asset, which had traded just $1,892 an ounce the previous day, had risen to $1,970 on Thursday, where it peaked before falling. For that day, gold was the obvious winner between the two, but this would turn out to be only a temporary win.

Bitcoin is making a takeover

Thursday came and went and the markets started to settle down again towards the end of the day. Bitcoin, which had taken a beating on the 24th, had bottomed out south of $34,000 before starting another climb upwards.

BTC recovers above gold on Friday | Source: BTCUSD on TradingView.com

As Thursday drew to a close, there was a clear reversal trend between bitcoin and gold. While the latter would have done well with the news, the next wave would see bitcoin once again become the dominant asset.

Related literature | Bitcoin Monthly Cyclicality Paints a Grim Picture for the Last Week of February

Gold had crashed again towards $1,888 an ounce, while bitcoin had recovered. The digital asset saw a price increase with the value approaching $40,000. While the physicality of gold helps foster confidence in the asset, the ease of moving a digital asset like bitcoin may be a bigger reason to keep it as a hedge. As the week draws to a close, BTC remains on a recovery trend, but gold has continued to fall.

Gold continues to fall on Friday | Source: gold price
Featured image from CoinWeek, chart from TradingView.com

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