Bitcoin recovered on Thursday from a 1.6 percent slide in the last daily session after the US reported a steep rise in the number of unemployment claims.
Over 1.1 million Americans sought first-time jobless benefits last week. The figures came higher than what economists had anticipated, which attested to the Federal Reserve’s warning about sluggish economic growth in the minutes of its July 2020 meeting released Wednesday.
The BTC/USD exchange rate rose 0.93 percent to circa $11,868 by New York noon session, helped by a renewed appetite for safe-haven assets among investors. Like Bitcoin, Gold also surged higher by 0.89 percent to $1,945.72 an ounce.
The capital into hedging asses flew from an underperforming stock market. The S&P 500, for instance, opened 0.5 percent lower over the disappointing labor data. The price of US government debts also surged, sending yields lower.
The US dollar index also dropped by 0.30 percent from its one-year week. As a non-yielding asset, the dollar appeared too expensive to hold, another factor that helped to raise gold and Bitcoin prices higher.
Gold Recovers, As Well
Michael Matousek, head trader at U.S. Global Investors, noted that the Fed minutes paved the way for more demand for safe-haven assets, especially gold. He said that people would feel the need to own gold as long as they remained concerned about the coronavirus pandemic and its effect on the US economy.
“The main fundamentals behind gold have not changed,” said Edward Meir, an analyst at ED&F Man Capital Markets. “Stimulus is still coming in and it’s very premature to say we’re recovering globally and should see higher rates and stronger dollar; we are many months away from that.”
The comments also painted a bullish picture for Bitcoin, which has erratically tailed the gold rally since March’s global market rout. Observers noted that the cryptocurrency is a better safe-haven asset than the precious metal, especially because its weightless, divisible, and transportable across borders.
Higher Bitcoin Demand
Statisticians at Into the Block also noted a higher demand for Bitcoin amid the uncertain macroeconomic sentiment, stating that the total number of addresses with a positive BTC balance is on a rise. Excerpts:
“Since March 16, the number of addresses with a balance in BTC kept growing to reach 31.22 million, meaning that it added 1.5 million addresses in that period.”
Bitcoin price climbed more than 200 percent from its mid-March nadir of $3,858. Analysts now expect the cryptocurrency to grow towards its all-time high near $20,000 by the end of this year.