Crypto
Bitcoin Fell 4% to About $81,000 and Gold Dipped Below $4,000 for the First Time Since July: Thursday's Sell-Off Spared Neither the Risk Trade Nor the Haven
Bitcoin fell about 4% to $81,360 on October 22 as $474 million of crypto futures were liquidated, while spot gold slipped below $4,000 an ounce for the first time since July. Both fell with oil above $113 even as the 10-year Treasury yield dropped about 20 basis points, a day when the haven bid went to bonds.
The usual pairing on a bad day for stocks is risk off in one asset and risk on in another: bitcoin falls, gold rises, or the reverse. Thursday had no such pairing. Bitcoin fell about 4% to $81,360, according to FXStreet, after slipping 2.4% to $82,700 in Asian trading earlier in the day, per Bloomberg. Ether traded near $2,400, and Solana and XRP lost between 2% and 3.5%. Spot gold, meanwhile, slid below $4,000 an ounce for the first time since July, according to investingLive, and silver fell about 4.5%. Gold is now roughly a quarter below its January peak of more than $5,400.
Both moves started from the same place, oil. Brent crude settled at $113.17 a barrel after attacks in Saudi Arabia, and earlier in the day futures markets were pricing a December Fed rate increase with about a 90% probability, the inflation-and-rates story that has weighed on gold all month. But the session did not end as a rates day. By the close the 10-year Treasury yield had fallen about 20 basis points to 4.95% as money left technology stocks for government bonds. That is the detail that matters: the haven bid went to Treasuries, not to gold, and gold fell anyway. The sell-off in AI and chip stocks, with Nvidia down about 4.4% and the semiconductor index down 6.7%, did the rest for bitcoin, which has traded this year with high-beta technology; when the Nasdaq loses 2.6% in a session, bitcoin rarely holds.
The crypto move was amplified by leverage. About $474 million of crypto futures positions were liquidated over 24 hours, according to Coinglass data cited by FXStreet, most of them long positions that were closed automatically as prices fell through their margin levels. That is what turns a 2% move into a 4% one. Flows into the spot ETFs were not enough to offset it: US spot bitcoin ETFs had taken in about $1.1 billion since the start of the week, according to TradersUnion, but ETF demand is measured at the end of the day, and the liquidations happened in minutes.
There is no rule that says gold must rise when stocks fall. It tends to when the fall is about growth, recession or a crisis of confidence, and to fall alongside them when the problem is inflation and rates, as it was in 2022. Thursday was a mix of both, and gold behaved as if only the second mattered, while bonds took the first. For bitcoin, the $80,000 area is the level traders are watching; for gold, the round number has already given way, and the next question is whether the Japanese inflation data, which on Friday showed core prices rising 2.1% and above the Bank of Japan's target, and the next US inflation reports change the path of real rates. Until they do, the two assets are likely to keep trading as the same bet.