• In spite of Thursday’s stock market plunge, traditional and non-traditional hedges like orange and bitcoin were not immune from the sell-off.
  • Technology stocks led a steep sell off of the sector, with the Nasdaq 100 index down pretty much as 5.5 % in Thursday afternoon trades.
  • Gold traded down pretty much as 1 %, while bitcoin fell six % on Thursday.
  • Typically, investors seem to these non-traditional assets to offer shelter in the course of stock market sell-offs.


Engineering stocks led the marketplace decline, with the Nasdaq 100 index down as much as six %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell 8 %, seven %, in addition to 6 % respectively.

Meanwhile, the S&P 500 fell almost as four %, while the Dow Jones industrial average fell over 1,000 points for a loss of three %.

The high technology-driven sell-off in the stock market spread to traditional and non-traditional portfolio hedges like bitcoin and gold.

Gold fell pretty much as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell almost as 6 % to $US10,455.

Each of those gold and bitcoin have recently been bid up by investors concerned about the expanding balance sheet of the US Fed and its recent policy overhaul which will likely lead to higher levels of inflation.

Last month, gold touched all time highs during $US2,089 an ounce, while bitcoin hit a multi year high of $US12,473.

Investors generally look to both gold and bitcoin as a hedge to inflation, deflation, and decreasing stock prices owing to their historically low correlation to equities.

But that historical correlation did not play out on Thursday.

One particular traditional asset type which did provide protection to investors from Thursday’s advertise sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up almost as 0.20 %.

For all the talk among Wall Street analysts that the popular 60 40 investment profile which balances stocks and bonds is actually “dead,” it is alive and very well today.