Safe assets and the cycle

When your preferred safe haven is just another cyclical asset

Bitcoin, gold and the S&P 500 have all made new record highs in recent weeks, which is not exactly a coincidence. In an inflationary environment, new highs in nominal terms are not that surprising, although the S&P 500 is also making new highs in inflation-adjusted terms. More significantly, they are all trading as risk assets, notwithstanding the fact that many view gold and BTC as counter-cyclical safe havens. That should lead us to question the safe haven appeal of both. If your preferred safe haven is doing well in a cyclical upswing with low asset market volatility, is it really providing much by way of a hedge?