📰 Bitcoin Outshines Gold as the New Investment Star

Ark Invest CEO Cathie Wood Believes Bitcoin is Overtaking Gold as Popularity of Precious Metal Declines Over Time; Here's the Latest

Cathie Wood claims investors are dumping gold in favor of Bitcoin.

In a world where investment options are as numerous as the stars in the sky, Bitcoin is emerging as the shining star that outshines even the most precious of metals, gold. According to Ark Invest CEO Cathie Wood, Bitcoin is not only replacing gold on the investment stage, but it is doing so with style and flair.

📈 Bitcoin vs. Gold: A Historical Battle

In a recent video presentation by Ark Invest, Wood demonstrated how commodities, including gold, have failed to provide a reliable hedge against inflation over the decades. Wood highlighted that gold, which traded for $555 per ounce in January 1981, had limited growth, reaching only $1800 in 2011 and now trading at $2030 after 13 years. In stark contrast, Bitcoin rose from $1 in 2011 to a staggering $43,000 today. With its decentralized nature and limited supply, Bitcoin has rightfully earned the title of “digital gold.”

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Wood humorously noted, “Bitcoin shot up 40% as the KRE – the regional bank index – was imploding.” This refers to the U.S. banking crisis in March 2023, where many crypto-adjacent banks faced turmoil. Gold also experienced a rise during that period, but not to the same extent as Bitcoin.

💼 Bitcoin’s Reaction to ETFs

While Bitcoin experienced a temporary decline when several U.S. spot ETFs launched last month, its price has since returned to pre-launch levels. Gold faced a similar situation when its first ETF launched in 2004, initially having a slow start before embarking on an impressive bull run from $400 to $1800.

Wood explained that Bitcoin’s brief decline after the ETF launches was merely a “sell-the-news event.” This occurs when speculators buy an asset before an expected positive event and take profits after it happens. She also highlighted that approximately 15 million out of the 19.5 million BTC in circulation are still held by “strong hands,” meaning they haven’t been transferred on the blockchain for 155 days.

Wood expressed her optimism, saying, “There’s now a substitution into Bitcoin, and we think that is going to continue now that there is a much easier way, less friction-filled way, to access Bitcoin.” Ark Invest was one of the nine asset managers to launch a Bitcoin spot ETF on January 11, further solidifying Bitcoin’s position as a preferred investment choice.

🔮 Looking Towards the Future

Based on these developments, it is clear that Bitcoin’s dominance is on the rise, threatening gold’s longstanding position as the go-to investment for hedging against inflation. The digital gold revolution shows no signs of slowing down, making it an attractive choice for investors looking to ride the wave of the future. However, it is essential to consider the volatility and risks associated with cryptocurrencies.

🔎 Q&A: Addressing Additional Questions

Q1: Is Bitcoin a safe investment option compared to gold? A1: While Bitcoin has shown significant growth and potential, it is important to remember that cryptocurrencies, including Bitcoin, are highly volatile. Investors should carefully assess their risk tolerance and consider diversifying their portfolios.

Q2: How accessible is Bitcoin compared to gold? A2: Bitcoin provides a more frictionless way to access and invest compared to gold. With the advent of Bitcoin spot ETFs, investors can easily include Bitcoin in their portfolios, increasing accessibility and liquidity.

Q3: How does Bitcoin’s limited supply affect its value? A3: Bitcoin’s scarcity, with only 21 million coins to be mined, contributes to its value. The fact that a significant portion of Bitcoin remains in “strong hands” indicates confidence in its future potential.

📚 Additional Resources: 1. Bitcoin not taking off as a mainstream payment: BOE governor 2. Bitwise’s Spot Bitcoin ETF among 5 largest ETFs launched in 2023 3. Global X exits the spot Bitcoin ETF approval race

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Last updated: February 7, 2024 15:40 EST (2 min read)

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