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The coronavirus death toll is spreading fears to investors who are trying to turn to gold, the U.S. dollar and also Bitcoin as a safe haven.
Investors are seeking safety in gold, the dollars and also Bitcoin as the coronavirus outbreak death toll in mainland China alone hit 1000. The virus has spread in a dozen other countries across the globe, raising a red alert to investors who are wary of the likelihood of an economic recession.
As a result of the coronavirus outbreak, big investment companies in China have closed temporarily to aid in the control of the virus. Multinational companies that are based in China like Tesla, Apple and Microsoft recently halted their operation in mainland China, therefore resulting in huge losses to the businesses.
This has led to a lot of fears among investors worldwide who are not sure of the future market as the virus is proving a headache to the authorities and the health sector. Consequently, investors have resulted to seek for alternative secure assets to protect them from an economic crisis.
Why Gold, Bitcoin and Dollars amid Coronavirus?
The three assets are safe-haven in their own terms. Gold is considered the oldest safe haven from time immemorial when our ancestors traded using pure gold. The technique has been passed on with generations up to date where central banks are rushing to accumulate gold as a safe haven. In countries like India, Venezuela and China where different crises are prevailing, gold has proved to be a secure future investment asset.
On the other hand, as the trade and economy system evolved with time, the dollar has continually gained the title of a world safe haven in times of crisis. This is due to the fact that most countries use the U.S. dollar to buy large import commodities like crude oil and debt settlement, hence a secure future investment.
Bitcoin is the latest asset to be included by investors as a safe haven, the digital crypto asset is not controlled by a central government. With the fast spread of coronavirus outbreak and the death toll rising by the day, a lot of investors are resulting to put their money in Bitcoin that promises a future return
Depending on the type of investor, choosing between the three assets can vary with certain factors like geographical reasons and purpose. As investors rush to secure the three assets considered safe, their prices are set to skyrocket sooner than later.
This phenomenon can explain the reason as to why Bitcoin rallied to hit $10,000 over the weekend. With most investors putting their money to acquire the crypto asset, the trade volume sharply increased hence increasing the demand that made the price skyrocket.