According to Ran NeuNer, founder of OnChain Capital, bitcoin (sometimes referred to as "digital gold") has outperformed precious metals every year since 2011.
Since 2017, as bitcoin has soared from less than $4,000 to a maximum of $20,000, the value of an ounce of gold has long been no match for 1 BTC.
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Since the beginning of 2019, the price of Bitcoin has more than tripled against the US dollar. |Source: coinmarketcap.com
Year-to-date, the price of Bitcoin against the US dollar has more than tripled, while the price of gold has risen from $1,282 to $1,514, an increase of more than 18%.
Bitcoin can attract qualified investors
Given the huge difference in market capitalization between Bitcoin and gold, Bitcoin has a greater potential for value growth in the short to medium term than gold.
Recent estimates suggest that the market value of gold is about $7.3 trillion, while the market value of bitcoin is around $166 billion.
However, Bitcoin has high liquidity in both the global cryptocurrency exchange and the over-the-counter (OTC) market, and the open positions of widely used margin trading platforms (such as BitMEX) are close to $1 billion.
Bitcoin's performance has always been better than gold, and will stabilize for a long period of time. As a traditional safe-haven asset and bond coexist, this may be due to more and more investors admit that Bitcoin may evolve into The main alternative value storage method.
However, contrary to popular belief, Bitcoin failed to prove the characteristics of safe-haven assets until 2019. It does not show an inverse relationship with the global stock market, nor does it follow the price trend of gold and bonds.
Nonetheless, financial institutions such as Bakkt and Fidelity, which are part of the ICE subsidiary of the New York Stock Exchange's parent company, Intercontinental Exchange, have demonstrated significant recognition of Bitcoin and significant support from institutional investor infrastructure. The currency has begun to become more attractive to a wider investor base.
Gold's rising catalyst may become a negative factor in cryptocurrency
In a time when the global economy is full of uncertainty and uncertainty, investors tend to stay away from the stock market and re-enter the safe haven market.
Therefore, in December 2018, when people's worries about recession and stock market adjustment peaked, the turmoil and the selling of “high-risk” assets intensified.
At the end of last year, some theories suggested that Bitcoin may have been affected by the deterioration of the macro trend, which triggered a price cut of nearly 50% to a low of $4,000.
However, in the next few months, as the atmosphere of US-China trade negotiations heats up and employment reports are positive, strategists expect the US stock market to perform strongly, suggesting that investors shift from traditional safe havens to high-yield bonds and stocks.
As many investors remain cautious about various geopolitical risks, gold is expected to remain stable. Whether this environment will allow Bitcoin to continue to outperform gold in 2020 remains to be seen.