Could Bitcoin Be The Next Gold?
With the growth of technology, investment and banking options have seen a new turn- due to the development of newer technologies. These technologies permit individuals to perform transactions at high speeds while earning interests on their initially deposited capital. The said technology is known as the “Blockchain” and Bitcoin was the very first cryptocurrency that was built on the blockchain.
The cryptocurrency had a rough start during its initial days, due to ignorance and low acceptance among its target buyers. However, what we know is that it has thrived and has thus proven to stand the test of time, and with its overwhelming growth in sight, it is only expected that it might replace gold very soon.
Source: Tradingview
There are lots of debate sessions occurring on Twitter and within various groups and forums.
https://twitter.com/saylor/status/1447565816174714884?s=20
The topics discussed or argued within these forums and groups is the possibility of the world’s largest digital currency “Bitcoin” outrivalling the popular stock asset “gold”. Speculations here and there about this possibility due to inflation hedges and portfolio diversification are concurrently mentioned and seem to be reasonable.
According to Ciara Sun’s Tweet: institutional investors have just portrayed Bitcoin as a high-priority investment over gold.
https://twitter.com/CiaraHuobi/status/1448590765903384577?s=20
Currently, the US inflation is at 13%, with a year high of 5+%. Inflation not only affects traditional assets like gold, and others, but also stocks and bonds; including every government-owned investment. With that in mind, wouldn’t you rather trade your hard-earned cash with a much more reliable and profit-driven establishment? Well, irrespective of that, here’s why we think Bitcoin is the new gold!
Why We Think Bitcoin is the New Gold!
Bitcoin is here to stay:
Before anyone can venture into the crypto space, whether they are a professional or a newbie, they all get a single piece of advice. This advice is not to craze over bitcoin and instead, to treat it with caution, and not as a mainstream asset. Bitcoin like every other digital and physical asset is subject to rises and falls, which makes it exciting for traders to enter.
However, Bitcoin is here to stay and there is a possibility that it will overpower some traditional assets in the near future.
According to the chief investment officer of Deutsche Bank in his published report, he thinks that “by now, it is clear that cryptocurrencies, especially bitcoin are here to stay,” but he would argue that “they are far from a mainstream asset class.”
Bitcoin is an asset that stores value:
Source: Investopedia
As mentioned in one of our posts, bitcoin has the possibility to store value and create the potential for amassing wealth, compared to other physical and digital investments. Mansoor Mohi-uddin, Chief Economist of the Bank of Singapore, wrote that the finite supply of bitcoin meant that investors would be much eager to increase their portfolio size.
This proposition is highly valid, irrespective of any regulatory and reputational challenges that such investors might experience. According to Mr Mansoor, crypto investors would need to find and associate with trustworthy institutions to securely hold their digital currencies. There is also a need for institutions to reduce volatility to medium levels while improving on technology.
Now, unlike traditional assets like gold, Bitcoin and other cryptocurrencies offer an easier and secure method of investing and hodling assets without having any issues. Compared to Bitcoin, gold can only be stored physically, which brings a huge dilemma to the owner, in case of loss. However, Bitcoin provides both fiat and digital asset qualifications by allowing the user to have online storage.
Bitcoin is highly volatile:
We can’t repeat enough the fact that Bitcoin’s volatility is one of the reasons for its success. Before Bitcoin, gold had its fair share of cash flow, but right now Bitcoin is a major alternative, for the above reason. However, seeing this volatility flow is a perfectly normal activity for a trader.
Anthony Scaramucci, CEO of SkyBridge Capital, says he has accepted the trajectory, as well as the volatility that Bitcoin presents to its investors. Unlike gold, Bitcoin has the possibility of increasing in value without any governing body influencing it; and with the number of people/celebrities and investors venturing into the investment, we could see even more volatility.
Now, there just leaves one more question about why, and how bitcoin could replace gold, as the new traditional value-oriented asset. The question is related to how the replacement would affect gold and its stakeholders.
Although this new development places gold in a very tight spot, we can still hope for Gold to experience a slightly bullish trend till the end of the year. However, we expect Bitcoin to experience the most volatility by hitting the $100,000 ATH, after beating its predicted $62,000 ATH benchmark.
Corporate bodies like Tesla and posts on Twitter from the likes of Michael Saylor show that they are still searching for more ways to incorporate Bitcoin into the everyday life of the average individual. If this pulls through, then we can say goodbye to anything gold-related.
https://twitter.com/saylor/status/1449163983936794627?s=20
Here’s what Michael Saylor said on Twitter a year ago:
