by | Mar 7, 2022 | Newsletters

This week, the world has looked on with horror at the ongoing developments in Ukraine. As Russia’s military continues its invasion of Ukraine, global markets have reacted with volatility.

At the time of writing, the S&P 500 (.SPX: INDEX) is down slightly since the eve of the Russian invasion on February 23rd. Foreign markets didn’t fare so well. The MOEX Index of the largest U.S.-listed Russian stocks fell almost 50% between the 21st and 25th of February. As of early March, Russian authorities have suspended trading. 

Despite the madness in the global equities markets, commodities and alternative assets have seen a steady course of growth over the past week. 

Brent Crude is now trading at $113 per barrel as of March 2nd (up +17% from February 23rd) and the precious metals markets are up almost across the board. Gold prices have risen above the $1,900 per ounce resistance point for the first time since Q1 2021 and silver has fared even better with +3.9% gains since last Thursday. Although platinum bullion took a small loss on the week, palladium is up an astounding +8.5% over the same period.

Price chart of Brent crude oil as of March 4, 2022

Crude oil (BRENT) prices as of March 4, 2022. (Source: Business Insider).

Lost in the conversation is Bitcoin. The world’s leading cryptocurrency experienced months of price consolidation in the run up to last week’s events. Since then, it’s gone on another bull run as investors seek safer pastures for their wealth. 

Bitcoin is currently trading above $43,400 for the first time in weeks and is up +18% since its late-February price correction. The same is true for Ethereum, which is hovering around $3,000 per token—marking an incredible rally from $2,341 on February 24th. 

Investors are looking for safer stores of value for their wealth, and cryptocurrencies, commodities, and precious metals are seemingly their preferred choice. But global instability isn’t the sole reason for the growth in the crypto sector. 

Last month, Fidelity Investments published a paper taking a bullish position on Bitcoin. In it, they suggest that Bitcoin is a durable monetary good that’s unique within the cryptocurrency class—in essence, that non-Bitcoin projects should be treated separately from Bitcoin. 

We agree that Bitcoin is an emerging monetary product rather than a mere cryptocurrency asset, many of which are hardly distinctive among traditional venture capital-backed projects. Fidelity understands this, and is just one of many large institutional firms with long positions in Bitcoin. More are likely to follow in the uncertain weeks and months ahead. 

There’s no doubt that we’re living through dangerous times. The silver lining is that there are safe-haven assets you can invest in that may help you through financial difficulties during this time. Gold, silver, and cryptocurrencies are but a few of them. To get started investing in alternative assets within a tax-advantaged account, check out our list of the best self-directed IRA companies. These IRA providers will help you open and fund your account, and transfer your wealth into stabler assets that are uncorrelated to the stock market.

Liam Hunt

Liam Hunt, M.A., is a financial writer covering global markets, monetary policy, retirement savings, and millennial investing. His commentary and analysis have been featured in the New York Post, Reader's Digest, Fox Business, and Forbes.

Join our Newsletter

Home    Blog     Reviews    Retirement     About    Contact    Disclaimer

Copyright © 2020 Sophisticated Investor