Bitcoin is getting crushed by gold and silver (and even copper) in April, ahead of its halving

MW Bitcoin is getting crushed by gold and silver (and even copper) in April, ahead of its halving

By Mark DeCambre

The latest Distributed Ledger column from MarketWatch - a weekly look at the most important moves and news in crypto

Welcome back to Distributed Ledger - the best place to get sharp, punchy insights on crypto. This is Mark DeCambre, editor-in-chief at MarketWatch, stepping in for our regular crypto columnists this issue.

If you expect me to talk about bitcoin's upcoming halving, you'll be sorely disappointed. Don't fret, however - there are plenty of links to our recent coverage of the quadrennial technical occurrence that will continue until, presumably, bitcoin hits its supply limit of 21 million coins around the year 2140.

In any case, find me on X (formerly Twitter) at @mdecambre to grouse about this week's installment of DL, if you must, or share any thoughts on crypto (or traditional markets).

So, let's get into it.

Gold and Silver vs. bitcoin

Gold (GC00) is having a moment (maybe even an extended one) and outshining bitcoin (BTCUSD), at least this month. So far in April, gold is up more than 7%, while the previously highflying cryptocurrency is down 15%, according to FactSet data as of Wednesday afternoon.

Silver (SI00) is enjoying an even richer month-to-date rise and up 14% in April so far - with the white precious metal looking at an 18% rise in 2024, besting gold's 15% advance. To be sure, bitcoin's up 46% in 2024, but the token's rip-roaring ascent has been sputtering this month.

MarketWatch's sister publication, Barron's, has raised the question of whether bitcoin buyers are selling crypto, as an inflationary hedge, and buying the yellow metal. The thinking is that gold would benefit if the Federal Reserve ultimately decides to cut benchmark interest rates, which stand at a range at 5.25% and 5.50%, a 23-year high.

It isn't clear that the Fed will, in fact, cut rates, and the timing of that hoped-for reduction also seems less certain than it did, say, a month ago.

Notably, nominal bond yields BX:TMUBMUSD10Y have been rising, theoretically dulling the appeal of gold and other precious metals, which don't offer a yield. On top of that, the dollar, which should make assets pegged to the fiat currency more expensive to buyers from abroad, has been stronger in April and was up 1.3% month to date, based on the popular ICE U.S. Dollar Index DXY.

It's worth noting that even the industrial metal copper (HG00) has outperformed bitcoin so far this month. Copper has seen a roughly 8% climb and is up 12% year to date. The orange metal is closely associated with building, and its price appreciation is usually considered a sign of a healthy, growing global economy.

So, what does this all mean for crypto investors?

Finding a decent alternative to stocks and bitcoin might not mean having to delve into other digital assets. Perhaps it is worth exploring some lesser-loved traditional assets like gold, silver and even copper, sometimes.

Crypto snapshot

Crypto-adjacent assets are getting hammered this week. Blame it on the halving (the one that I said I wouldn't be talking about)? Nah! It is probably a retrenchment of the same speculative fervor that drove the Dow Jones Industrial Average DJIA and the S&P 500 index SPX to new heights this year. But that voracious appetite is cooling and other investments are being recalibrated, as Fed Chief Jerome Powell is now suggesting the regime of higher-for-longer rates may be a more protracted one than perhaps some had anticipated.

Coinbase Global Inc. shares $(COIN)$ were down nearly 13% so far this week as of Wednesday afternoon, while shares of mining stocks Marathon Digital Holdings Inc. (MARA) and Riot Platforms Inc. (RIOT) were off roughly 7% and almost 10%, respectively.

Looking at crypto funds, Grayscale Bitcoin Trust GBTC, Fidelity Wise Origin Bitcoin Fund FBTC and Ark 21Shares Bitcoin ETF ARKB were all down by more than 7% this week.

Must-read

Everything you need to know about the bitcoin halving (MarketWatch)Uniswap says it has received SEC Wells notice, with charges imminent (MarketWatch)Goldman Cautions Against Extrapolating Previous Bitcoin Halving Cycles for Price Predictions (CoinDesk)Buy Bitcoin Miners Ahead of the Halving, Bernstein Says (CoinDesk)Bitcoin 'Halving' Will Deal a $10 Billion Blow to Crypto Miners (Bloomberg)

-Mark DeCambre

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April 17, 2024 15:29 ET (19:29 GMT)

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