Gold Vs Bitcoin

Bitcoin many approach it to tulips, protagonists of the first speculative bubble in history. But for others, Bitcoin could be the heir to gold: a healing heir to the point that he would already start competing with the bullion, as well as shelter and valuable asset.

Opposite directions

With the rise in interest rates, the bullion lost its enamel. Quotes are still up by 11% since the beginning of the year, but for more than a month – despite the multiplication of mysterious ‘flash crashes’ – they are trapped in a narrow oscillation band between $ 1.260 and $ 1.290 an ounce, showing the lowest level of volatility since 2001: a situation that does not appeal to small savers, scared by the sudden turnaround in the market, which is increasingly occurring, and hedge funds, who instead find the best trading opportunities in the market volatility.

In the third quarter, demand for gold has fallen to the minimum of 8 years, also due to a shrinking investment in Etf, which in 2017 according to the World Gold Council reduced to “a fraction” compared to the year of the year Last year, only Europe remained in the rush, while ransom prevails in Asia.

Another story for Bitcoin, which makes the speculators go crazy due to the ability to plummet (and precipitate) even 30% in a couple of days, as seen this week: after a dramatic collapse last weekend, the price has already returned to over $ 7,200, a short distance from the historic record of $ 7,447 reached on November 5th. Despite violent oscillations, its value increased by almost 650% in 2017.

Some investors might have been tempted to change the horse, abandoning (at least in part) gold for Bitcoin. The hypothesis is all to prove, but there are those who start to add some empirical evidence.

On Friday, for example, gold lost more than 1% in a matter of ten minutes due to a sudden sales order of just 4 million ounces at Comex, which seems to have no justification in the publication of any kind of data or news. In the same span of time – as the well-known financial blog Zero Hedge has pointed out – Bitcoin also moved in the same violent and sudden manner but upward.

Google Trends also put a few drops in the ear: in October for the first time search terms “buy Bitcoin” passed “buy gold”, an event that BullionVault relates to the collapse of a third of the quantities of gold exchanged on its platform, compared to the average of the previous 12 months.

Crypto value in ascent

It could only be a coincidence that the boom of digital coins occurs in parallel to a phase of gold weakness. Certainly, however, crypto values are no longer a niche phenomenon, isolated from the financial markets.

Every day there are exchanges worth about 750 million dollars, writes the Wall Street Journal. And just yesterday, the total capitalization of digital coins reached the historic record of $ 217.1 billion, according to CoinMarketCap.

Bitcoin alone makes nearly $ 120 billion, roughly the same as McDonald’s’s stock market value and more than that of many bank giants, including Goldman Sachs and Morgan Stanley.

But most of all, his status has changed: from alternative money, reserved to technology-makers and criminal networks, he has become a full-fledged investment asset (which is at high risk), which begins to affect the finances too.

Cme is preparing to launch the first Bitcoin futures in December, offering not only greater legitimacy to the crypto value (many funds are not allowed to invest), but also – not least – the opportunity to go “short” wager on any price drops. The Cboe will quote Bitcoin options.

Following these announcements, one of the largest hedge funds in the world, Man Group, with assets under management for over $ 100 billion, came to the fore: “Conceptually, digital currencies are an interesting thing,” said Luke Ellis at Reuters – Today, they are not part of our investment universe, but if there is a future at the Cme they could go in. ”

Even Goldman Sachs – who in a report has also refrained from considering crypto values as “the new gold” – begins to approach this world: “In response to customers’ interest we are exploring how to best serve them in this area,” he said. spokesman of the bank, confirming printing rumors.

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