Bitcoin (BTC) edged closer to $38,000 support on June 17 as comments from the United States Federal Reserve sparked a mass sell-off for gold.
Bitcoin escapes gold’s fate
Wednesday’s Fed meeting and subsequent comments from Chair Jerome Powell stopped Bitcoin from drifting higher, taking its toll on progress across cryptocurrency.
At the time of writing, $38,900 formed a focus as resistance set in but a tight wedge of support remained nearby. Data from Binance showed a large wall of bids lined up at $37,000 and above.
More conspicuous losses on the day came from gold, however, which sank to a six-week low after the Fed’s inflation message.
The dollar saw a major boost, but the combination of predicted higher interest rates combined with future tapering of coronavirus measures formed a perfect storm for the precious metal.
At the time of writing, XAU/USD traded below $1,800, having lost almost $100 over the past 24 hours.
Fighting all the way dow
While traditionally adversaries, Bitcoin and gold remain part of the portfolio recommendations for many major investment names. Last week, it was Paul Tudor Jones giving tip-offs to the public, telling mainstream media that a 5% Bitcoin and gold allocation respectively was what he “wanted” currently.
Gold bugs nonetheless held their ground. Peter Schiff, founder of SchiffGold, accused the Fed of misunderstanding macroeconomic forces.
“The only thing transitory about these prices is that they’re getting worse,” he said in a new episode of his Peter Schiff Show.
“We’re transitioning from bad inflation to horrible inflation and the Fed is completely oblivious to what’s going on.”
For Tudor Jones, Schiff, ever the Bitcoin opponent, had a classic warning.
“Based on the extremely dovish statements made by Powell during his press conference and recent statements made by Paul Tudor Jones… should now go ‘all-in on the inflation trade,'” he tweeted.
“Welcome to the party Paul. But you won’t truly be all-in until you sell your Bitcoin.”