Self-Directed Investor News Feature: THESE TWO CURRENCIES are in a "race to the bottom"

Two highly popular currencies favored by self-directed investors are presently in a race to the bottom and could hit unforeseen lows before hitting their nadir, warn analysts. Gold and Bitcoin (BTC) both foundered mid-March, with investor sentiment strangely veering away from gold, a traditional safe-haven asset, while investors liquidated bitcoin investments and the currency fell to a value of $3,915. The epic drop, which started in February and culminated in a two-day spiral in mid-March, was largely a response by investors to a perceived need for cash capital in light of the COVID-19 threat .

"Investors [were] liquidating alternative assets such as gold and cryptocurrency to meet market obligations and build cash reserves, a similar theme to that which occurred during the last financial crisis," said Stack COO Matthew Dibb . At that time, most analysts predicted bitcoin and gold would both fall much farther before hitting the bottom.
When Will These Currencies Bounce?
The question for most gold and bitcoin investors who had not liquidated their holdings by mid-March became: When would the currencies finally start to bounce? Notorious gold bull Peter Schiff said the U.S. economy is already in freefall, a position he solidified when Congress signed a trillion-dollar aid package into law earlier this week.

"It's like we've already jumped off the top of the building, off the top of the Empire State Building," Schiff warned. "There is no way to change our minds now. We are going to hit that pavement."

Not surprisingly, Schiff believes that when the economy does hit the pavement, gold investors will benefit. However, proponents of bitcoin say their currency is likely to offer far more benefits when things do hit bottom and start to bounce.
"I cannot express how bullish I am on bitcoin," tweeted Global Macro Investor founder and CEO Raoul Pal. He added he expects gold investors to be shielded from the chaos in the economic system also, "albeit with a smaller potential upside than for bitcoiners."

Pal's sentiments came in the wake of a massive bitcoin rally on March 20, when the cryptocurrency climbed to $6,650. Compared to the prior week's lows, bitcoin appreciated nearly 80 percent in just about seven days. Compared to holding stock in a company that may or may not be able to permitted to do business in the coming weeks or months, investing in digital currency suddenly seems far safer than the stock market to many investors who previously had never considered investing in bitcoin or holding more than just a little bit of gold as a portfolio hedge.

"These are truly extraordinary times," said Australian fund manager and co-founder Angus Coote. "I've been in the business for 25 years, and this makes the global financial crisis look like child's play."

Are you investing in gold, bitcoin, both, or neither? Why? When did you start?

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Author: Carole Ellis
Carole Ellis is the editor-in-chief of Self-Directed Investor Magazine and editor of the Bryan Ellis Investing Letter. Reach her at [email protected]
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