Question

Providing some historical perspectiveson gold and cryptocurrency, explain how the COVID-19 affected the gold and cryptocurrencies. (Hint:use some historical data on both markets and specifically focus on the period from January 2020 till date for the trend and impact analysis;you can use additional data and analysis to support yourfindings and discussions). critically review and analyze the performance of these financial assets

Answer 1

it has been a historical perspective that gold is generally alternative of normal equity investment at the times of the crisis and gold will be rising at the time of the crisis and there has been a new camp which believed that the Bitcoin are more volatile than the equity is and they are going to crash more at the time of economic downcycle.

At the time of the coronavirus crisis, the prices of gold has surged to the new high and it has broke the old highs made during last recession so it can be said that the gold is trying to break out and it is providing a opportunity for a large number of investors as there is an expectation of impending recession and increased uncertainty in the economy.

Cryptocurrencies on the other hand are considered more volatile than stocks and they are not alternative of equity investment because they generally have no fundamentals and hence these Bitcoins are increasing and decreasing faster than equity is in these coronavirus concerns.