Italexit fears and Bitcoin's bounce – Just a coincidence or are cryptos also safe havens?

  • Italy's constitutional crisis and fears of the nation leaving the euro-zone sent global stocks and the Euro tumbling.
  • US bonds, gold and also cryptos gaining, with digital coins finally rebounding.
  • There is a case to be made for a total coincidence and also for a correlation.

Italian bond yields suffered the most significant leap since the 90s, at the same time that George Soros "broke the Bank of England." The same Soros warned of a major and imminent financial crisis, listing Italy among other issues. Money fled out of Italy into the safety of German and US bonds. Stocks dropped as fears of an Italian exit of the euro-zone dubbed Italexit, or Italeave spread. There is no euro-zone without Italy. Inconclusive election results in March suddenly turned into a major global crisis.

See more: Italexit: 9 questions and answers to the Italian crisis and potential euro-exit

At the same time, the prices of cryptocurrencies rose. Bitcoin (BTC/USD) jumped above $7,500, Ethereum (ETH/USD) reached a peak above $573, and Ripple (XRP/USD) briefly topped $0.60. 

No connection 

There is a good case why these movements are NOT correlated. We recently wrote how the price of all three cryptocurrencies might be ready to bottom out just as Goldman Sachs and JP Morgan are preparing to enter the market. That piece came out Friday and the digital assets continued suffering a bit longer before a rebound was seen.

In addition, at least in the case of Bitcoin, our technical expert Tomas Salles showed that buyers are increasing their intensity according to the Directional Movement Index. The picture is more complicated in other cryptocurrencies. 

Here is how things looked like before the bounce, when buyers of Bitcoin began increasing their strength:


Another argument against the correlation between the action in stocks and cryptos is unrelated: the worst moments in Italian bonds and the Euro came between an hour or two before the crypto comeback. Later on, it became harder to draw the charts together.

Italeave and the Crypto climb are connected

To take the opposite side, we can begin with the latest point. First came the massive sell-off in Italian bonds, the Euro, and global stocks. And then came the rise in crypto coins. The money did not flow immediately, but the sequence is telling. 

Another argument is about the nature of the crisis and the vision of cryptocurrencies. The Italian President rejected a government chosen by representatives elected by the people, in a modern, Western European country. Many see his move as the establishment or the elite defending itself against the freedom and free choice of the people. Or, as a puppet of external forces. This is a crisis of government.

Bitcoin and other cryptos represent a decentralized, democratized system which undermines the establishment. When the establishment is in crisis, alternatives are sought after


Arguments can be made for both sides. These are still early days. As the crisis unfolds, we will examine the correlation and could reach more explicit conclusions. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

SafeMoon price looks to skyrocket 30% as technicals flash buy signal

A brief technical and on-chain analysis on SafeMoon price. Here, FXStreet's analysts evaluate where SAFEMOON could be heading next.

More Bitcoin news

Uniswap price eyes 20% gains as UNI technicals scream ‘buy'

Uniswap price faced a blockade at $21.51, slowing its recovery. The RSI reveals a bullish divergence in play, hinting at a 20% climb. A breakdown below $18.37 will invalidate the bullish thesis.

More Litecoin news

Litecoin contemplates 17% ascent after reclaiming crucial barrier

Litecoin price experienced the second flash crash, which bottomed on September 21. While the descent was steep, the recovery seems to be coming along well. The recent upswing has pushed past a key resistance level, but LTC needs to hold above it to confirm buyers’ presence.

More Litecoin News

XRP price flips massive support floor into formidable resistance

A brief technical and on-chain analysis on XRP price. Here, FXStreet's analysts evaluate how Ripple behaves as it trades below key resistance.

More Ripple news


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast