Bitcoin is emerging as the credible store of value, ahead of Gold during this time of unprecedented loose monetary policy. On Monday, Bitcoin hit a new all-time high of $19,863 after a 150% run-up this year since March. Now, investors believe the digital currency is on course but won’t replace Gold as the risk diversifier.
- Here is why Bitcoin Rivals Gold
- Gold was considered a safe haven in the past and the baby boomer generation but is now being replaced by automated assets like bitcoin.
- Bitcoin is gaining strong demand among the millennials, and trading the digital currency is much more functional “than passing a bar of gold around.” – Rick Rieder, Chief Investment Officer at BlackRock Inc.
- While Gold and Bitcoin transactions can be viewed on the blockchain, a large part of gold trade occurs on London’s over-the-counter market, where less data is available.
- Bitcoin is more transparent, unlike Gold, where “you have to trust the custodians to tell you about any flows in the market.” Lyle Pratt – Bitcoin independent investor
- Bitcoin is a popular trading ground for a range of retail players, speculative pros, and exotic quants, while traditional investors have stayed on the sidelines.
- Bitcoin’s rise has been due to speculative fervor, unlike Gold, whose poor performance has been underscored by market developments such as vaccine progress.
- Funds like family offices are selling their gold exchange-traded funds holdings for Bitcoin
- Why Bitcoin is unlikely to Replace Gold
- Bitcoin’s market capitalization is only about 3.1% of the size of Gold.
- Bitcoin’s tumble last week underscores its volatility that has kept mainstream investors at bay.
- It is possible that bitcoin has no value in years to come while the same cannot be said of gold. – Patrick Armstrong, Chief Investment Officer, Plurimi Wealth LLP.
Gold is currently gaining as Bitcoin loses. XAUUSD is up 1.62%, BTCUSD is down 1.62%