Source (old news)
Remember how I mentioned that Bitcoin and cryptocurrency in general have a strong correlation with gold and silver? Well, not anymore. We already know what happened to the crypto market by this point. TLDR of the #cryptocrash is as follows:
1)CZ was an early investor of FTT (FTX’s token)
2)CZ announced that he wanted to dump 2b dollar worth of FTT on the market
3)People soon realized that Alameda Research (FTX) is insolvent
4)Everyone tried to front-run CZ
5)The panic selling begins.
6)Cascading liquidations (FTT dumps more than 80%)
7)CZ announces he’s going to bailout FTX
8)The Crypto market takes a big hit
When crypto prices fall these days, it is usually due to rising interest rates. While the market is already in a downward spiral, the CZ further exacerbates the situation. At this point, CZ is unquestionably the most powerful person in the crypto space. Silver is currently trading at $21.278, up more than 13% in the last two weeks. Gold is also doing well, bouncing more than 6% in the last two weeks. Meanwhile, Bitcoin has fallen more than 20% since the tragedy, and the bleeding has not stopped yet! So much for "high correlation," I suppose the moral of the story is — do not extrapolate.
[The silver price chart shows strong upward momentum.]
The Bottom Line
Past performance does not accurately predict future performance. We must remember that crypto is an asset class; when the crypto market crashes, no cryptocurrency will escape unscathed. It is sensible to diversify your capital across asset classes such as silver and gold. The only correlation that crypto and precious metal had is that they were both “short dollars”.