The year 2020, which is already talking about it in the cryptosphere, was above all marked by a strong correlation between Bitcoin (BTC) and gold in the markets. This is due to several factors such as the global pandemic, financial uncertainty and the elections in the United States. But is this the first time that we have observed such a correlation? We have gone into the predictions of Bloomberg and various global observers for you to give you our analysis of the incredible rise of two equally sparkling assets. And finally, what if you choose the best of both worlds for your investments? We deliver everything to you in this new article.
Warning : This article is brought to you by the company Vera One. Crypto investments are risky by nature, do your own research and invest only within the limits of your financial capacity. This article does not constitute an investment invitation.
Bloomberg combats Bitcoin and gold
In a recently published report and already very divided, the visionary eye of Bloomberg made the whole cryptosphere dream by aligning predictions that are at the very least optimistic: according to our famous analysts, the new digital gold would reach 100,000 dollars in 2025, no you are not dreaming, that is a number that will rock more than one.
Their calculation is simple, Starting at $ 10 in 2011, the cryptocurrency was content to add zeros consecutively. Bitcoin therefore took about four years to go from $ 1,000 to $ 10,000 in 2017, therefore a “doubling of the maturation of the facts” would make it pass to $ 100,000 in 5 years. Does all this seem very simple to you? We went to investigate a little further and what we found is not going to leave you indifferent.
First, the rise in Bitcoin prices creates an increase in demand and not supply since by nature the number of bitcoins in the market remains stable and makes it a scarce asset, like gold. This is what explains whywith each boom in its price, Bitcoin marketing is guaranteed and thus naturally attracts new investors, from all walks of life.
With less than $ 200 billion in capitalization, Bitcoin is still too small for large institutions like central banks, but as its price increases, it could rise to the same level as gold.
Secondly then, Bitcoin tends to look more and more like gold. Just as Bloomberg announces that Bitcoin will flirt with $ 14,000 before 2021, he also analyzes that cryptocurrency is more and more correlated with gold: the graph below also shows the biggest Bitcoin / Gold correlation since 2010 over 12 months :
Thirdly, Bitcoin would therefore become a new version of gold, it is not for nothing that many analysts already called it digital gold : in fact, the digital asset is increasing considerably and most indicators are green for widespread adoption and price appreciation, despite its scarcity which makes it a sought-after asset.
It is not the crisis that will disrupt this trend, which, as Bloomberg indicates, has been observed for a long time. It remains to be seen if these analyzes will be confirmed, in the meantime, we continue our analysis in what explains the strong correlation between yellow gold and digital gold.
Bitcoin Vs Gold: tell me where you put your money I’ll tell you who you are
In the battle between Bitcoin and Gold, the investor is king.
Indeed, on closer inspection, will Bitcoin manage to overtake gold as a safe haven for institutional investors?
It is true thatin times of crisis gold and bitcoin are safe investments, as they have proven over time by their strong correlation. It is explained by the macro hedging allowed by these two rare and precious assets used against inflation and the devaluation of fiat currency and more traditional stocks in the stock market.
Bloomberg figures thus confirm that cryptocurrency is by far the best performing asset in this year 2020, with an increase of 66%, ahead of gold which however peaks at record amounts. Yield is arguably the competitive advantage of digital gold over its metal alter ego. But, beyond even the correlation between Bitcoin and Gold, the real question is who will reign supreme in the coming years? In other words, Will the version 2.0 gold rush actually happen?
With current negative interest rate trends, investors are paying banks to ensure their liquidity, but capital flight away from bonds risks tipping the balance towards Bitcoin, even if Bank of America Gold announces an upcoming rise in gold to $ 3,000 an ounce.
To observe the choices of Saylor for Microstrategy, many institutional investors are likely to be inspired to no longer buy only gold as a simple refuge but also invest heavily in new digital gold, without holding back.
We went to push the reflection as far as Russia where Bitcoin would now be more popular than gold among investors. Indeed, it is the World Gold Council (WGC) which reports the info : out of 2023 investors surveyed, 68% of participants said “gold is considered an effective store of value”. However, in a chart that illustrates investments in Russia over the past 12 months, cryptocurrencies represent a higher percentage than gold: 17% vs. 16%, everything is relative, but it should be noted.
On the side of our Russian neighbors, Bitcoin would therefore be a serious competitor to gold which will have to demonstrate its interest in the years to come if it is to maintain its place as an all-time safe haven.
Even though Bloomberg notes a bullish rally in gold through 2023, what about Bitcoin’s run to zeros?
Bitcoin meteorite about to break through the sound barrier?
The Bitcoin rally is well and truly putting the world’s first cryptocurrency ahead of gold and silver, and some of our friends across the Atlantic would even have called it the Paypal Bump, due to the very recent announcement of l‘Opening of a new service by fintech already very popular around the world.
In addition to this phenomenon that could be anticipated, and despite a decrease due to the coronavirus pandemic, Bitcoin is on the verge of one of the biggest hikes in its history potentially far exceeding that of 2017.
With the strong correlation observed vis-à-vis gold, the famous cryptocurrency is turning from a risky speculative asset to a crypto version of the yellow metal.
To the moon and back?
In any case, this is what many analyzes show. Here, in this graphic made by Fork, we even read that Bitcoin would be a new precious commodity, having supplanted gold and silver :
While the $ 13,000 is not the last level Bitcoin has reached so far, our data shows it is the 20th largest single-day hike since September 21, 2019.
The Paypal announcement will therefore have caused a stir in the meteoric rise of encrypted metal.
But, according to Mike McGlone’s predictions, gold could reach $ 7,000 by 2025. According to him, the same monetary conditions which made it possible to multiply the price of gold by 7.5 between 2001 and 2011 are visible today, so put your bets!
Really, your heart is still swaying and all these predictions make you say that taking the best of both worlds would be the more informed choice?
We have the solution for you.
VeraOne: a golden project
We presented them to you previously, and no matter how much we turn the project around, we are still convinced. For those who haven’t followed our latest papers, VeraOne is the made in France stablecoin that you can use to own physical gold via cryptocurrency and all in a simple and secure way. The little extra? They use recycled gold, and as we told you in a previous article, this is a crucial point in the future development of the gold market to ensure its reserves.
With VRO, it has never been easier to solve the endless questions you have between choosing Bitcoin or Gold: 1 VRO token = 1 gram of gold, the answer is ready-made, and if you want to get started, nothing could be simpler, we already explained the procedure in TCT:
- Create your account on the VeraOne platform
- Verify your identity with KYC verification (fast and efficient)
- Acquire VRO tokens with Bitcoin or Ethereum
- The gold rush has just started making history in encrypted form!
Still wondering what a VRO is? The VeraOne (VRO) is an ERC20 token based exclusively on physical gold, stored in highly secure areas at the Geneva Free Ports.
Finally, to reassure you, they have everything planned: VeraOne ensures the security of your physical gold while Ngrave provides security of your VRO tokens, it is in any case the promise of a beautiful golden end of the year.
We hope this analysis has inspired you, and if your heart is still wavering, take advantage of the curfew to take a look at our articles. in the alternative investment forum! to continue learning more about alternative investments, the history of the world’s oldest precious metal and its new adventures with digital gold. And above all, keep an eye, the end of the year may be crazy!
Karen is passionate about new technologies in general, and blockchain in particular! Finding out about trendy news, the latest market developments, and the treasures of the ecosystem, she is happy to help you discover this universe in all its colors.