Risk-heavy bitcoin falls while gold soars

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Gold is soaring, largely driven by investors flocking to safe-haven assets, while risk-filled bitcoin is taking a dive, market watchers said Monday.

The precious metal is expected to continue its monthslong record-breaking rally, unlike cryptocurrencies, which are expected to tank to $70,000 amid a cyclical downturn.

“Investors are turning to traditional safe-haven assets, prodded by global trade tensions and heightened geopolitical risks,” Standard Chartered Korea strategist Hong Dong-hee said. “Months of uncertainties involving U.S.-China trade relations have driven demand for gold. Further, central banks are increasing their gold reserves, indicating the precious metal’s strength as a hedge asset in times of uncertainty.”

In addition, an increasing number of investors are attracted by the limited volatility of gold, Hong said. “Gold investors tend not to seek immediate short-term rapid gains, compared to equity or crypto investments, for example. Rather, an increase in holdings of gold signals that it is considered a reliable source of investment during unstable market conditions.”

Bitcoin, on the other hand, is a risk asset, according to Kim Kab-lae, the head of Korea Capital Market Institute (KCMI) Capital Markets Financial Law Research Center.

“Unlike gold, bitcoin has recently shown signs of a steep fall, not too different from the price trajectories of tech stocks, which turn downward when market sentiment sours. Bitcoin is far from a reliable safe-haven asset,” Kim said.

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The assessment is backed by Elliott Wave analyst Jon Glover, who recently said the bitcoin bull market that began in early 2023 appears to be over, following a recent fall from a peak of $126,000 to $104,000.

Elliott Wave is a theory used by market analysts to explain how market movements form recurring patterns of five-wave and three-wave structures, which repeat across various time frames and exhibit fractal-like behavior.

Each level of these timescales is called a degree of the wave, or price pattern.

Glover, known for his precise market forecasts, said crypto prices could crash to $70,000 or lower, a potential drop of more than 35 percent from the current figure of around $108,000.

“I firmly believe we have completed the five-wave upward move and are now entering a bear market that may last until at least late 2026," Glover said on his social media account. "I expect bitcoin to trade between $70,000 and $80,000, and possibly even lower."

Glover explained that while the possibility of bitcoin reaching its record highs of around $126,000 or climbing slightly higher cannot be ruled out, the broader trend is pointing to a bear market, meaning prices are likely to be lower a few months from now.

Bitcoin’s bullish five-wave pattern started in late 2022. At the time, prices were below $20,000, but have since surged to a record of close to $126,000 earlier this month.