Gold, bitcoin fail to save investors from Thursday’s stock market meltdown

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

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Engineering stocks led the marketplace decline, with the Nasdaq 100 index down almost as six %. Mega-cap tech winners as Apple, Microsoft, and Amazon fell eight %, 7 %, in addition to six % respectively.

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

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

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

Both gold and bitcoin have recently been bid up by investors worried about the expanding balance sheet of the US Fed and its the latest policy overhaul which will probably result in increased levels of inflation.

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

Investors generally look to all gold and bitcoin as a hedge to inflation, deflation, and falling stock prices due to their historically low correlation to equities.

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

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

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

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