Gold and bitcoin tumble while equities swing upward on COVID-19 vaccine news

Cryptocurrency markets whipsawed Monday morning during a broader market session driven by news from pharmaceutical firms Pfizer and BioNTech about their late-stage COVID-19 vaccine efforts.

The price of bitcoin bucked the broader market, falling by more than 5% after rallying above $15,800 earlier this morning. At last check, the price of bitcoin was trading slightly below $15,000. Meanwhile, global equities reacted positively to the vaccine news, which reports say has been found to be more than 90% effective. 

The S&P 500 index is trading up nearly 3% at the time of writing. Leading the charge were stocks most impacted by COVID-19 related lockdowns such as airline companies. 

Conversely, the news sent gold into a tailspin. After enjoying a months-long rally, the price of bullion was trading down nearly 5%. This price action is notable given that bitcoin has mostly traded in line with risk-on assets rather than safe haven assets such as gold. 

As for gold, one analyst said the metal is experiencing a "reset" after months of strong performance. 

"Perhaps we're now seeing a bit of a reset moment for gold, where its correlation with risk assets starts to fade and it returns to its traditional roots as a safe haven instrument," Craig Erlam of OANDA noted. "Although this may be a little premature at this stage."

About Author

Frank Chaparro covers the intersection of financial markets and cryptocurrency as Editor-at-Large. Since joining the publication in 2018 as its first reporter, he has played a key role in building The Block into a leader in financial journalism and research. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected]

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