In safe asset means, Bitcoin is outpacing gold.
Bitcoin is approaching an all-time high against gold. Digital currency surpassed 59,000 dollars on the 30th (local time) and gold fell below 1700 dollars.
According to Cointelegraph, a media outlet specializing in cryptocurrency, as the value of bitcoin (BTC) hits an all-time high with the price of Bitcoin (BTC) approaching $59,000, suggesting a possibility that a new preference for safe assets will emerge.
The price of bitcoin compared to gold reached 34.94 ounces on the 30th. On March 13, when Bitcoin exceeded $61,000, the BTC-Gold comparison price peaked at 35.35 ounces.
Bitcoin’s value against gold has more than doubled over the past three months and has grown nearly 7 times since October 2020.
Meanwhile, at the New York Commercial Exchange (NYMEX)’s Comex division, gold futures plunged to less than $1700 per troy ounce on the 30th (local time). The price was as low as $1,676.50, the lowest in three weeks. After surpassing $2,050 per troy ounce in August 2020, it has fallen by nearly 18%.
2020 could be considered the year of gold, as gold hit all-time highs in every major currency before the first crash of $2,000 per US dollar. Therefore, the year ended with an increase of about 22%. However, compared to Bitcoin’s annual return of 265%, it is less than a tenth.
With a recent $1.9 trillion stimulus package fueling inflation fears, assets such as gold and bitcoin should theoretically work well to hedge investors’ bets against falling dollars. Also, due to the recent increase in bond yields, the merit of gold has fallen a lot.
Even some prominent analysts, such as Bloomberg’s McGlon, believe that gold is being beaten by Bitcoin for its reputation as a safe haven. Earlier this month, McGlon pointed out on Twitter that “gold will always have a place in the collection of gems and coins, but by most indicators, Bitcoin is increasingly replacing metal as a safe asset repository for an investment portfolio.” .
Even JPMorgan, a group that has long been critical of bitcoin, has argued that digital currencies will take up a fraction of gold’s market share. In a December 2020 report, strategist Nicholas Panigirz Goglu said, “Institutional investors’ adoption of bitcoin is just beginning, whereas in the case of gold, institutional investors’ adoption is very advanced.” If it proves correct, gold prices will suffer structural headwinds over the next few years.”