Bitcoin continues to give confidence as new gold to be a safe haven for investors.
In the past year, a correlation between gold and crypto money prices has emerged due to investors beginning to sell gold to buy Bitcoin. Analysts are expecting the trend to continue, although prices have recently recovered.
Precious metal capital heading to Bitcoin
According to the 2017 Gold Research released in January, Thomson Reuters analysts said that in December, crypto paralara, which increased in price, directed capital in significant amounts from precious metals. The report indicates that retail investors now have a shorter investment horizon. He also says many investors can not resist the appeal of trading with the crypto currency.
Christopher Louney, RBC Capital Markets strategist, told Fortune magazine that the development of gold, a potential correlation between cigarette exchange rates and the gold value, is quite new. He noted that there is a potential correlation between the value of gold and the exchange rates of cryptography.
Louney, although no relationship was found before, the trend emerged at the end of 2017 and continued in early 2018. - When the price of bitcoin rose quadrupled, investors had virtually emptied their substantial portfolio of gold to buy a crypto currency.
Louney also stressed that the correlation is small and that gold prices are not yet sufficient to carry. He also voiced that it is early to say that investors prefer Bitcoin instead of gold as a safe haven. Traditionally, macroeconomic factors continue to dominate the playing field, such as stock market performance, by influencing gold prices.
Louney said that gold prices started at $ 1.303 a year on average due to increased stocks, and that they could be kept at low levels throughout the year.
There is a long way to see Bitcoin as the new gold
Christopher Louney thinks Bitcoin is a relatively unknown asset compared to other investment assets, as well as having high volatility. Gold, by contrast, is well established with institutional investors and has plenty of liquidity.
Bitcoin trade volume reached over $ 3 billion in daily trading, while gold trading volume reached $ 250 billion per day.
The bitcoin-gold correlation may increase over time. The developing relationship may also mean that there may be substitutions. Bitcoin investors can use their cash for crypto money in difficult times for less volatile gold.
In January, a report sent to the bank's customers, Goldman Sachs analyst Zach Pandl wrote that the rapid increase in the demand for Bitcoin was triggered by the increasing dissatisfaction between the existing monetary systems and the existing banking infrastructure.
Pandl indicated that digital currencies like Bitcoin would provide lower returns in the long run, but at higher levels, such as gold and other safe haven assets, as crypto currencies matured into a large asset class.
