Safe-haven Assets Gain as Market Turmoil Intensifies
As trade tensions between the U.S. and China escalate, investors are flocking to safe-haven assets. Bitcoin, gold, and the Swiss franc are leading the charge.
The Swiss franc strengthened to 1.2500 against the dollar, up from 1.2390 earlier this week. Gold prices climbed to $4,017, nearing the all-time high of $4,053. Bitcoin, after a brief dip to $107,000, rebounded to $112,800.
despite a $4.5 million outflow from spot Bitcoin ETFs on Friday, the funds still saw a $2.7 billion weekly gain. Cumulative inflows now exceed $62.7 billion, dwarfing the $1.7 billion outflow from the SPDR S&P 500 ETF.
Major U.S. stock indices fell over 2%, with the Fear and Greed Index plunging from 53 to 29. This shift reflects growing investor anxiety.
Why are these assets considered safe havens?
- Bitcoin has a limited supply of 21 million coins, making it scarce and in high demand.
- Gold is favored by central banks, with global purchases reaching 900 tons this year.
- The Swiss franc benefits from its economic neutrality and stability.
These assets are thriving as the VIX volatility index hits 23, signaling extreme fear in the market. The demand for safe-haven and junk bonds has also spiked.
As trade relations worsen, with President Trump increasing tariffs on Chinese imports and China retaliating, these assets are likely to remain strong.
