Gold, bitcoin fail to safeguard investors against Thursday’s stock market meltdown

  • Despite Thursday’s stock market plunge, non-traditional and traditional hedges like yellow as well as bitcoin were not immune from the sell off.
  • Technology stocks led a steep sell-off of the sector, with the Nasdaq 100 index down as much as 5.5 % in Thursday afternoon trades.
  • Gold traded down as much as one %, while bitcoin fell 6 % on Thursday.
  • Typically, investors appear to these non-traditional assets to offer shelter during stock market sell-offs.


Engineering stocks led the market decline, with the Nasdaq hundred index down pretty much as 6 %. Mega-cap tech winners as Apple, Amazon, and Microsoft fell 8 %, seven %, along with six % respectively.

Meanwhile, the S&P 500 fell almost as 4 %, while the Dow Jones industrial average fell over 1,000 points for a loss of 3 %.

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

Gold fell pretty much as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell as much as 6 % to $US10,455.

The two gold and bitcoin have just recently been bid in place by investors worried about the expanding balance sheet of the US Fed and its recent policy overhaul that will probably lead to increased levels of inflation.

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

Investors typically look to both gold as well as bitcoin as a hedge to inflation, deflation, and decreasing stock prices because of their historically low correlation to equities.

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

A traditional asset class that did offer protection to investors from Thursday’s advertise sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up pretty much as 0.20 %.

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