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Safe haven and bitcoin are seldom mentioned in the same sentence, but that seems to be changing as bitcoin records a 150% gain so far for the year. From Moneyweb.

The Crypto Fear & Greed Index has swung away from the ‘Fear’ end of the scale. Image: Chris Ratcliffe/Bloomberg

Bitcoin (BTC) touched R800 000 on Monday as ether (ETH) breached R42 000, delivering what looks to be another pre-Christmas bull market on expectations of easing interest rate pressures around the world.

These are prices last seen in April 2022 before the onset of the crypto bear market that ended in January 2023.

This brings BTC’s gain for the year to 150%, compared to ETH’s 75%.

Also on the move is gold, which broke $2 100/oz this week before retreating to just above $2 000/oz at the time of writing.

Banking group ING expects gold to nudge higher into 2024 as the US Federal Reserve cuts rates and the US dollar weakens. This has increased demand for safe haven assets, says ING commodities strategist Ewa Manthey, who expects prices to remain above $2 000/oz into 2024 “as the global rush for gold continues”.

Read: Spot gold rises to record on dovish Fed remarks

Steven Sidley, University of Johannesburg professor of practice and author of It’s Mine: How Crypto is Redefining Ownership, says the surge in crypto prices is driven by an alignment of factors: “The Securities and Exchange Commission [SEC] in the US appears likely to approve at least six bitcoin ETFs [exchange-traded funds] in the coming weeks, and one of these will be BlackRock, the world’s largest investor with funds under management that are larger than many countries.

“Over the last six months we’ve also seen increased enthusiasm and adoption of BTC from people and organisations previously hostile to it. There’s a growing realisation that rather than being a risky asset, it has actually saved many people’s savings around the world. With this comes growing concerns about the US government’s ability to manage the economy as inflation remains above where it was pre-Covid, and US debt continues to expand to fund two wars [in Ukraine and the Middle East]. They see this as unsustainable.”

Omer Iqbal, CEO of FiveWest, says the market is betting on Federal Reserve interest rate cuts in 2024, and that has sent gold to record highs.

“The overall market sentiment is extremely bullish. As investors look to diversify their portfolios in uncertain times, some turn to BTC as kind of digital safe haven. Sometimes referred to as ‘digital gold’, bitcoin has become a way for investors to branch out beyond traditional stocks and bonds.”

The Crypto Fear & Greed Index, which measures crypto sentiment based on metrics such as trend, volatility and social media searches, is now on the ‘Greed’ end of the scale but is still well short of all-time highs recorded in previous bull markets.

Source: alternative.me

The expected arrival of spot BTC ETFs appears to be driving much of the recent speculative activity, with options trades betting on a BTC price of $45 000 by March 2024.

Standard Chartered stuck to its forecast of BTC at $100 000 by the end of 2024, a prediction first made in April this year, partly on the basis of its role as a safe haven in times of heightened risk.

Another reason for its bullish outlook is the ‘halving’ of BTC supply, which happens every four years. The next halving is due in about April 2024, and these events are usually preceded by a bull run.

The last ‘halving’ was in 2020, when the rate of BTC issuance every 10 minutes dropped from 12.5 to 6.25 BTC. The next halving in 2024 will drop the rate of issuance to 3.125 BTC every 10 minutes.