Bitcoin, Gold, and Meta: Weekly Overview — February 10

This week’s price movements for Bitcoin (BTC), gold, and our stock pick Meta Platforms.

BTC

Bitcoin (BTC) has somewhat recovered coming into the month of February. After dropping as low as $33,000 in the final week of January, BTC started out February trading around $38,500.

However, it started falling a bit by February 2, ending up at $36,500 on February 3. BTC spiked the following day, achieving $41,000 by February 5, where it sat until February 7.

From there it continued rising, hitting as high as $45,500, before channeling down to $43,000. BTC is currently trading around $45,000.

Bitcoin’s “fair value” should be around 12% lower than the current price, based on its volatility in comparison with gold, according to JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou.

In a recent note, the strategists calculated the fair-value level to be around $38,000 based on Bitcoin being roughly four times as volatile as gold, they wrote.

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the strategists wrote. 

GOLD

Gold has overall fared favorably in February. Starting out the month trading at $1,795, the price of gold jumped to $1,805, before dipping down again on February 2, then rising back up to $1,810 the following day.

It sank again a bit, then experienced very sharp dips just past midday on February 3 and 4, however, by February 8 the price of gold had recovered to $1,822.

It bumped up to $1,827 by February 9 and is currently trading just above $1,830.

Gold prices were range bound after hitting a two-week high earlier, with investors eager for U.S. inflation data to determine what the next steps might be in the U.S. Federal Reserve’s monetary policy tightening plans.

“Gold finally appears to be rediscovering its place as an inflation hedge and is now moving independently of U.S. yields,” said CMC Markets UK chief market analyst Michael Hewson. “If inflation expectations start to increase, that could push gold higher as it could prompt the Fed to tighten too quickly and potentially slow down the global economy.”

Following the first few days of February, Meta Platforms, Inc. (FB) stock proceeded to drop upon the release of an earnings report.

Starting out the month at $315, before reaching $225 on February 2, FB plummeted with the earnings report release, gapping down to $245 on February 3.

Since then FB has continued trickling down, hitting $230 on February 4, then nearly $215 by February 9.

It recovered a bit since then and is currently trading around $230.

After the U.S. Federal Reserve forbade Meta from going forward with its crypto project, Silvergate will be officially acquiring the intellectual property and other assets of the Diem Association for $182 million.

“As part of integrating the acquired assets into Silvergate’s existing technology, Silvergate expects to incur approximately $30 million of additional costs in 2022,” the company officially announced on Jan 31.

Concerns from the FED included perceived risks such as “destabilizing runs, disruptions in the payment system, and concentration of economic power.”

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