Is Bitcoin (BTC) the New Gold? – Remaxima
No wonder Bitcoin is called “digital gold.” Its close relationship with the precious metal has been cited by experts and crypto coin enthusiasts from around the world for many years — and for good reason. The flagship of cryptocurrency has almost the same qualities as yellow metal. Both of them can be “mined”, transferred, divided, but most importantly, they are limited assets and, perhaps, are most convenient as safe havens.
Analyst Mike McGlone describes this year as a time for safe haven assets. He suggests that the movement of gold will serve as an indicator of price indicators BTC. McGlone also notes the recent rise in the value of BTCs after the authorized assassination of Iranian general Kassem Soleimani.
“Bitcoin’s initial reaction to the (Jan. 3) U.S. airstrike that killed one of Iran’s most powerful generals was a good test of our premise that the first-born crypto is maturing toward a digital version of gold,” said the analyst.
Soon after the consequences of his death, the first cryptocurrency and gold rallied. The precious metal reached a seven-year high of $ 1,600, and its digital protégé increased by 20%.
Also, an indicator that Bitcoin is a safe haven asset is evidenced by its correlation (or lack thereof) with the US dollar. According to the Bloomberg report, the coin shows “ the greatest-for-longest Bitcoin-to-dollar negative 52-week correlation”, observed since 2010. This ratio between gold and dollar is almost the same as for BTC and USD.
Despite all the indicators, not everyone believes that the first cryptocurrency and precious metal have a strong connection. The founder of Quantum Economics, Mati Greenspan, called their relationship “weak” and noted that until recently the correlation between them was negative.
Although BTC may still be too volatile for many investors, most of them in the asset class are increasingly evaluating digital shelters that maintain a stable price. The Bloomberg report predicts that market capitalization is likely to expand this year, as many alternative cryptocurrencies are trying to keep investors, and the supply exceeds demand.
“Bitcoin should again outshine most crypto assets in 2020 as the unique and appreciating digital version of gold,” the report said.
Published at Fri, 31 Jan 2020 07:35:28 +0000
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