Bitcoin (BTC) and gold are fast becoming the safe-haven assets of choice as new data predicts that advanced economies will shrink 35% in Q2.

According to annualized figures from Goldman Sachs quoted by Bloomberg on April 14, the second quarter of 2020 will see the biggest three-month economic retraction in history.

Goldman: Europe should print more money

The scale of shrinkage will outpace the 2008 Global Financial Crisis, which previously held the record for the timeframe.

In a note to clients, Goldman analyst Jan Hatzius noted that workers returning to employment still risked fuelling fresh coronavirus infections. Instead, he argued, central banks should pump more cash into the economy worldwide.

“The response in Europe needs to be scaled up, via greater (and ideally centrally funded) fiscal easing and a more unconditional ‘whatever it takes’ commitment to the integrity of the euro area,” he wrote. 

“Emerging economies will need a lot more help from the rich world.”

That perspective jars with that offered by pro-Bitcoin figures. Unlimited quantitative easing is fuelling unemployment and deflation, Max Keiser argued in the latest edition of his Keiser Report TV show on Tuesday.

For Keiser, the net result of fighting coronavirus economic turmoil with money printing is a new form of inequality. Dubbed “neo-feudalism,” it will create an uber-rich class and a peasant class, he warned.

Governments buying huge amounts of equity is one example of centralizing value within easy reach of lawmakers and bankers. During the Keiser Report, Mark Yusko, CEO of hedge fund Morgan Creek Digital, described the United States Federal Reserve’s current equity buying activities as “illegal.”

Gold cracks 14% weekly gains

Meanwhile, despite facing its own teething problems as a result of coronavirus panic, gold is seeing conspicuous success.

On Tuesday, XAU/USD hit 7-year highs of $1,720, sealing monthly gains of 14%. The precious metal is now within $100 of its all-time highs seen in 2011. 

Bitcoin versus gold 3-month chart. Source: Skew

At the same time, Bitcoin reversed brief losses in response to a stock market futures dip on Monday, aiming to reclaim $7,000.

Commenting on both gold and Bitcoin’s recent performance, Cointelegraph Markets analyst Scott Melker summarized on Twitter:

“Gold was in an ascending channel - since 2015. THIS is how you break out of an ascending channel with strength and show that every ascending channel is not a ‘bear flag.’ Bitcoin and gold. You don't have to choose.”