Key Takeaways
- Bitcoin and gold reacted positively to President Trump’s social media post on the role of gold in global economic dynamics.
- China’s Commerce Ministry said it will retaliate against any country cooperating with the USA over tariff wars.
- A synchronized rally between Gold and Bitcoin suggests potential market uncertainty and a weaker US Dollar.
The prices of gold and Bitcoin (digital gold) surged by 1.98% to 2.78% during early Asian trading following US President Donald Trump’s renewed attention to the two leading financial assets.
The price surge was caused by a statement by Trump on his Truth Social page, in which he declared, “The golden rule of negotiating and success: He who has the gold makes the rules.” As Trump hyped gold, China warned it would retaliate against any country that cooperates with Western countries at the expense of its interests in the ongoing tariff war. Gold traded around $3,393 per troy ounce, while the leading crypto asset settled at $87K.
Warning Reinforced Positive Sentiment
China’s warning is also believed to have reinforced the positive sentiment toward gold and Bitcoin, with Beijing’s Ministry of Commerce reiterating its opposition to any country serving US interests in a way that would undermine China’s interests. The Ministry stated:
“China firmly opposes any party reaching a deal at the expense of China’s interests […] if this happens, China will not accept it and will resolutely take reciprocal countermeasures.”
Moreover, Beijing stated that it would support any country willing to uphold “international fairness and justice” against the United States’ “abusive tariffs” and “unilateral bullying,” adding that the US actions risked reverting international trade relations to the “law of the jungle.”
China Bought Large Amounts of Gold
The US president’s golden rule sentiment is characteristic of his nature, as he has made similar remarks before. Some analysts believe Trump’s remarks could be a response to China’s recent decision to buy large amounts of gold. Reports indicate that in February alone, Beijing bought over 50 tons of gold, signaling a strong interest by China in controlling the world’s gold supply. As a result, analyst Crypto-Rover suggested that the US should sell its gold and start buying Bitcoin instead.
Considering that it was the first time in a long time that gold and Bitcoin have surged together, analyst “The Kobeissi Letter observed that the reaction signaled a growing consensus among the investors regarding the uncertainty surrounding the negative trajectory the US dollar was taking. The letter stated:
“Gold has hit its 55th all-time high in 12 months, and Bitcoin is officially joining the run, now above $87,000. The narrative in both Gold and Bitcoin is aligning for the first time in years: Gold and Bitcoin are telling us that a weaker US Dollar and more uncertainty are on the way.”
Conclusion
As gold and Bitcoin reacted positively to Trump’s golden rule, the US dollar index slipped sharply and hit a three-year low. The development occurred as the market awaited Trump’s possible removal of Federal Reserve Chairman Jerome Powell. Reports from financial market sources indicated that US President Donald Trump intends to control US monetary policy, which has made traders nervous and pushed them to sell dollars.
Frequently Asked Questions (FAQs)
Why is Bitcoin often compared to digital gold?
The scarcity of gold has enabled it to maintain its position as a hedge against inflation. Similarly, Bitcoin is an emerging scarce asset that may serve as an additional option to hedge against inflation. This is why Bitcoin has been called digital gold.
Why is Bitcoin more valuable than gold?
BTC serves as a store of value and a currency, and it’s easier to fractionalize it so you can buy things and transfer them internationally.
Which properties of money are better for Bitcoin than gold?
Bitcoin has additional benefits such as portability, divisibility, and transparency, making it a great choice as a digital store of value.
