Bitcoin and gold were record high last month
Wojciech R. Bolanowski, MD PhD
Chief AI Officer, retail and digital banking, payments and fintech in EU, GCC, SEA, enthusiast of cross-border banking
The best month ever for Bitcoin
March 2024 brought the best ever Bitcoin performance. The cryptocurrency reached its record high point on March 14th when the price was set above $73,000 per coin. The cryptocurrency remained in that extremely high zone for two days. Then it began to fall. However, the resistance level set around six thousand dollars has been keeping Bitcoin firmly on the levels significantly higher than in February. March began with Bitcoin worth around fifty thousand dollars. It means that total monthly gain is at least ten thousand per coin. Comparing the current pricing with the day the war in Ukraine broke up (my traditional baseline for asset monitoring) we see Bitcoin higher by over 70%. This is amazing proof that digital asset is much more dynamic and over performs other, more traditional investments. However, we should remember that Bitcoin was not always the leader of growing assets. Not far ago, in fall 2023, the cryptocurrency was still well below pre-war levels. In half a year it not only made up for all previous loss, but was able to set new record price.
Price changes of Bitcoin in last two years - note the high volatility of the asset and impressive pace of growth in the last six months; the chart and calculations applied average market prices in USD; source of chart: xe.com
Fiat currencies: delicate movements
In the asset basket I have been monitoring for twenty five months already there are three fiat currencies: Euro, Z?oty, and Shekel. Last month we saw only tiny change in the price of those currencies and their behavior was mixed. Euro strengthen a bit, but still remains far below its pre-war price (in total it’s now worth less by 4.15%). Shekel is worth less than in winter 2022, too. In case of Israeli currency the total drop from February 2022 is – 11.2%. What’s worse, Shekel lost some value in March itself, falling from $0.2755 to $0.2746. Polish currency – Z?oty – failed in March, but still remains relatively resilient. On March 24th 2024 Polish Z?oty was worth more than on February 24th 2022. The difference is 1.66%. In a nutshell, monetary market (speaking about traditional, fiat currencies) was quite stable last month. Clearly, nothing major happened to US Dollar, the major benchmark and leading global currency. We saw before that fiat currencies reacted mainly to FED policies and rate cuts. Those events are much more powerful drivers of currency exchange rates than military conflicts all over the globe.
Gold set a new record
As for now three out of five assets are worth more (in USD) than before the outbreak of the war. Bitcoin is undisputable leader, with its 72.10% growth. Gold has been doing fine for most of the time, totaling +13.34% growth of the price. In March gold grew a lot (+130 USD/oz). For some time it was traded for over $2,200 per ounce which is the highest ever price. Unfortunately, it seems to be reaction for growing political and military risks, revolving around election period in America, decreasing level of Ukraine support from some countries, and speculation about risk of war spreading? towards NAATO member states. If there is an asset which shows its dependence on military situation in Eastern Europe it could be gold, indeed. Apart from gold and Bitcoin, which set their individual records last month, the third asset worth more than before the war is Polish Z?oty. It could be a sign of hope that war won’t spread, actually. If the currency of the country which borders the war zone is a good performer, we can speculate that markets haven’t bought the direct war threat to Poland. But nobody knows what the future is and the level of uncertainty is absolutely higher than few months ago.?
Gold, Euro, Bitcoin, Shekel and Z?oty price in USD for last 25 months. Bitcoin and gold just reached their historically highest levels. The chart showing relative change of the average market price of EUR and PLN (in USD); data source: xe.com
Summary of February 24th; 2024:
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