E The End Of The Gold Rush?

There are claims that BTC and gold hold similar characteristics as asset class. They are both scarce and high in demand. So, if BTC becomes more widely accepted by retail and institutional investors, it could be seen as a new way of hedging against market volatility, thereby removing some of the shine from gold. One could even go so far as to argue that BTC could be used as part of a short-term hedging strategy in reaction to sudden market shocks.

For now, there are simply too many unknowns at play to properly conclude what the future could have in store for BTC. If the price stabilizes and institutional investors begin to accept its position in the markets, there could be a stable future on the horizon. Conversely, if there is a sudden loss of faith in the cryptocurrency, and moves to regulate it, the opposite could no doubt prevail.

The coming months will be an important time for the price of gold. Should the recovery of the major economies proceed as planned, demand for the precious metal is likely to drop. Nevertheless, this does not change the fact that gold is a safe haven asset that can be effectively used as part of different investment strategies.

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Disclosure: Giles Coghlan is Chief Currency Analyst, HYCM – an online provider of ...

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