Bitcoin It is a cryptocurrency that has been revolutionizing the world economy for 13 years, but why should one even consider comparing it with a commodity such as gold?
Many will claim that gold is a safe haven asset of proven value that we can trust, also that supports economic or political crises. Is it really true?
Let us analyze a little these popular affirmations, if we take as an example the current war that is unfolding on Ukrainian territorywe can under common logic affirm that it would be difficult to transport 700 thousand US dollars in gold, since this amount would be equivalent to a bank ingot of approximately 12 kilos, in a country at war with requisitions of soldiers at checkpoints it would be a bad idea to transport it with us, It would also be a bad idea to leave it in a place that we know little about what will happen or when we will be able to return.
We can affirm that the popular belief that it is a value receipt is conditioned to where we physically have our metal, since in an economy at war, we cannot expect to transact our bullion in a bank or safe place, in addition to the fact that its price would be linked to those who are really willing to buy it from us and for how much.
Another point to note is that, as we mentioned the safeguard of value depends on having buyers willing to buy our assetsCurrently, China and Russia are the countries that possess the largest amount of physical gold and as most know, President Nixon eliminated the Dollar-Gold standard in 1971, making it no longer a convertible currency.
So who really stores value in gold?
Analyzing the history of Prayedthis increased its price in each crisis that the planet experienced, the turbulence in the markets always leads to a refuge in this commodity that does not disappointOr rather, it did not disappoint.
During the most recent periods of turbulence, gold rose 18.1% since the beginning of 2020, time that includes a global pandemic, which led to a massive recession, a bear market and a skyrocketing commodity prices with high inflationbeing the moment of gold to shine.
However, while the commodity did show reasonable returns, these were much lower than those of equities and commodities in general, and slightly higher than those of bonds. So gold did well, but worse than expected.
According to J. P. Morgan “gold saw outflows of around $7bn earlier in the year, while bitcoin saw inflows of at least $3bn. This caused the relative underperformance of gold and sent the Bitcoin price skyrocketing.”
THE IMPORTANCE OF CRYPTOCURRENCIES
On the face of it, this underperformance in the face of current turbulent periods, including the aforementioned war, where an increase in gold was expected, was overshadowed by the role of cryptocurrencies so that both Russia and Ukraine receive money from other parts of the world, showing that the price of gold is simply speculation, and it is not as easy to trade as it is Bitcoin.
This is not to say that saving in physical gold is not an excellent option, on the contrary, this metal has been with us for thousands of years being chosen to store value. But for more liquid savings, it may be a better option Bitcoin. The price of both assets is unclear, Bitcoin it is very young and gold is physically linked to how much we are paid for it at the time we want to sell it.
At the same time Bitcoin it can be used as a means of payment and does not pay interest, allowing it to be stored for long periods of time. Furthermore, compared to precious metals, cryptocurrencies they are not in danger of theft, they have security measures.
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