Gold, bitcoin neglect to shield investors against Thursday’s stock market meltdown

  • In spite of Thursday’s stock market plunge, traditional and non-traditional hedges as gold and bitcoin were not immune from the sell off.
  • Technology stocks led a steep sell off of the sector, with the Nasdaq hundred index down pretty much as 5.5 % in Thursday afternoon trades.
  • Gold traded down as much as one %, while bitcoin fell six % on Thursday.
  • Typically, investors look to these non-traditional assets to offer shield in the course of stock market sell-offs.


Engineering stocks led the market decline, with the Nasdaq hundred index down pretty much as six %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, 7 %, in addition to six % respectively.

Meanwhile, the S&P 500 fell pretty much as four %, while the Dow Jones industrial average fell more than 1,000 steps for a loss of 3 %.

The steep technology driven sell-off in the stock market spread to traditional and non-traditional profile hedges as bitcoin and orange.

Gold fell as much as one % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell almost as 6 % to $US10,455.

The two gold and bitcoin have just recently been bid set up by investors worried about the growing balance sheet of the US Fed and its the latest policy overhaul which will likely result in increased levels of inflation.

Very last month, gold touched all time highs during $US2,089 an ounce, while bitcoin hit a multi year high of $US12,473.

Investors often look to all gold and bitcoin as a hedge to inflation, deflation, and falling stock prices because of their historically small correlation to equities.

But that historical correlation didn’t play out on Thursday.

One conventional asset class that did give protection to investors from Thursday’s promote sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up as much as 0.20 %.

For all the dialogue with Wall Street analysts that the popular 60 40 investment profile that balances stocks and bonds is “dead,” it’s alive and very well today.

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