Record highs for bitcoin and gold are threatening to send mixed messages about the appetite for risk across global markets.

The twin peaks for the cryptocurrency and the precious metal mark the first simultaneous records for the two since bitcoin emerged from the shadows more than a decade ago. Yet markedly different drivers are typically thought to move each asset — gold has acted as a haven store of value for millennia, while any bitcoin role beyond pure speculation is hotly contested.

Bitcoin has jumped almost 50% this year, helped by inflows into recently minted US exchange-traded funds that directly hold the digital currency. Gold’s rise, however, could be taken to indicate defensive positioning on concerns about the perils of geopolitical tension or a possible pullback in global stocks in the wake of a record-breaking run.

One way to square the circle is to consider the behaviour of traders who chase short-term momentum across asset classes, according to Chris Weston, head of research for Pepperstone Group.

“Gold has been hugely traded overnight, the volumes are massive — I’ve had a lot of client calls asking what is happening,” he said. Fast-money investors “are buying the momentum and that is what we are seeing in bitcoin as well”.

Both Bitcoin and gold are viewed as beneficiaries of expectations of looser monetary policy. Swaps markets show a 62% chance of a Federal Reserve interest-rate cut in June, compared with 58% at the end of February.

Bitcoin record

Bitcoin surged to a record $69 191.95 on Tuesday in the US — scaling the peak the token reached in November 2021 during the pandemic — before retreating to trade at around $63 300 as of noon Wednesday in Singapore.

Bullion rose to a peak of $2 141.79 an ounce on Tuesday, surpassing the previous high set in early December. The precious metal has climbed almost 5% over the last five sessions.

Read: Bitcoin ETFs: gold-like adoption is a meme too far

“The crypto story can be tied in with what is happening in equity markets and broader risk taking,” said Kyle Rodda, senior market analyst with Capital.Com. “We’re seeing a resurgence in meme coins that suggests irrational, risk-taking behaviour — which is consistent with what is happening in some parts of the equity market.” — Richard Henderson, (c) 2024 Bloomberg LP