Key facts:
In a scenario of economic uncertainty, purchases of gold and other safe-haven assets are growing.
Bitcoin could destabilize gold if it gains more market cap.
No one knows what effects the advance of the Russian war will have on the price of bitcoin (BTC). But there is something that is clear today: uncertainty and the economic blockade against Russia have provoked a radical reaction in the markets. On the one hand, world stock markets fell and, on the other, the purchase and price of safe-haven assets, such as gold, oil and some raw materials, skyrocketed.
But There is an interloper among the safe-haven assets that have exploded in purchases since the beginning of the war: bitcoin.. It is the largest cryptocurrency on the market, which has gotten an overbought shock that has caused its price to rise from USD 37,000 to more than USD 40,000 since Russia began the bombing in Ukraine.
This indicates that it is being revalued despite the fluctuations that its value has had in this period. And in turn, it would indicate two possible scenarios: either it is simply a normal trading behavior that cryptocurrency usually has, or we are facing a possible historical fact that shows that bitcoin is consolidating as a refuge asset and digital gold.
So far, the cryptocurrency has too much short-term price volatility to be considered a haven asset to protect the value of money. However, in thirteen years (since its birth in 2009) a bitcoin has gone from being worth pennies to USD 40,000, and even more if we take the historical peak that it reached in November 2021 for USD 67,600.
Compared to it, an ounce of gold today is barely worth USD 2,000, a very low figure considering that it is an ancient asset that has been used for more than 21 centuries. Although its advantage is that its value has remained relatively stable over time due to its continuous commercialization and scarcity in the world. Something that different analysts believe could also happen with the largest cryptocurrency on the market, which is taking its first steps towards becoming the new alternative to gold.
Bitcoin has everything to become digital gold and it already is for the heads of Apple and VISA
Referents as Steve Wozniackthe co-founder of Apple and alfred kellythe CEO of VISA, have cataloged bitcoin as the new digital gold. This is because they have constant market interest and limited capacity. There will only be 21 million bitcoins in the world when they are finished mining, which fulfills the character of scarcity that distinguishes gold. That is, it is a deflationary product.
This differs from national currencies that are devalued due to the increase in banknote printing, such as currently the dollar, the peso and the bolívar, for example. Above all, in times of economic crisis and bad government practices. That is why the war has encouraged the purchase of gold and other commodities such as oil and raw materials, such as gas and wheat, for example, at the same time as bitcoin.
Marion Laboure, the economist and market strategist at Deutsche Bank, has commented what humanity has always sought strong assets that were not controlled by governments or a power. And he noted that “gold has played this role for centuries.” Although he has warned that bitcoin could potentially become the digital gold of the 21st century.
Bitcoin is a unique, transparent, immutable, efficient, programmable, and scarce asset; a combination of features that could grow its value in the long run. It is mathematically pure gold, the only digital gold.
Steve Wozniak, co-founder of Apple.
CriptoNoticias reported that this same idea is suggested by the analyst Zoltan Pozsar of the renowned Swiss financial institution Creddit Suisse, who warned that we are beginning a new world economic order. He argues that the war and the economic crisis will cause people to seek assets that are not confiscable by the government, thus generating a change of stage in the history of money that would benefit bitcoin.
Bitcoin could destabilize gold
The view of bitcoin as gold has been accentuated by the beginning of the war and the search for valuable assets in the face of a possible global economic crisis. However, this message is not new for those of us who have been in the community for a long time. Different figures have made this prediction before, when a war in 2022 was something unimaginable.
One of them is the social trading company eToro that almost a year ago declared: “Bitcoin could destabilize gold in the next decade, to be a modernized hard asset, our digital gold for the new era”. And he added that what is missing is for investors to value digital goods more than physical ones.
Although it is worth clarifying a part of society has already done so by depositing a large sum of money in bitcoin. At the moment the cryptocurrency has a market capitalization of USD 796 billion, which positions it as eighth in the top 10 of the assets with the highest volume of money invested. Gold and silver are first and sixth respectively, while the rest of the list are company shares.
From eToro they reported that, if the cryptocurrency increases its market capitalization by 50% each year, it would surpass gold in 2030, which currently has USD 12.6 billion. In that case, a bitcoin would be worth USD 2,114,385, that is, five times what it costs now. A future that we will have to see to believe, since its successful past does not guarantee that it will continue to grow, although it is a good sign.
The fact that bitcoin is one of the 10 assets with the highest volume of money invested in the world demonstrates the current great interest in the asset. Above all, if we remember that it has only been on the market for thirteen years. I mean, he’s relatively young. Its growth could continue and be encouraged during the fall faced by national currencies and markets, thus positioning itself as digital gold.
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