For all everybody’s been talking about bitcoin as of late, it looks like gold is on the verge of getting just as much attention.Gold Is Potentially Outdoing BTC in a WayBitcoin and gold are often compared with one another. Bitcoin, playfully referred to as “digital gold” by crypto enthusiasts, is often cited as having aspects and traits that are similar with the precious metal in the sense that it can be used to hedge one’s wealth against inflation and other economic problems, but while bitcoin is still a new asset that is working to gain footing in the financial space, gold has been an established asset for centuries, and many analysts believe it can never be overtaken.One of those people is Boris Schlossberg, the managing director of FX strategy at BK Asset Management. In a recent
Topics:
Nick Marinoff considers the following as important: Bitcoin, Bitcoin News, coronavirus, Gold, News
This could be interesting, too:
Chimamanda U. Martha writes OSL Strengthens Partnership with Solomon JFZ Ahead of Hong Kong ETF Launch
Temitope Olatunji writes Japanese Metaplanet’s Purchase of Bitcoin Worth .25M Signals Growing Corporate Adoption
Godfrey Benjamin writes Here Are 3 Major Recent Cardano (ADA) Upgrades to Know
Steve Muchoki writes BNY Mellon Invests in Spot Bitcoin ETFs from BlackRock and Grayscale
For all everybody’s been talking about bitcoin as of late, it looks like gold is on the verge of getting just as much attention.
Gold Is Potentially Outdoing BTC in a Way
Bitcoin and gold are often compared with one another. Bitcoin, playfully referred to as “digital gold” by crypto enthusiasts, is often cited as having aspects and traits that are similar with the precious metal in the sense that it can be used to hedge one’s wealth against inflation and other economic problems, but while bitcoin is still a new asset that is working to gain footing in the financial space, gold has been an established asset for centuries, and many analysts believe it can never be overtaken.
One of those people is Boris Schlossberg, the managing director of FX strategy at BK Asset Management. In a recent interview with CNBC, he stated:
I guess gold is the real bitcoin. Ultimately, I think what’s happening is the market is taking implicit bets that inflation is starting to pick itself back up, and I think there’s a really good reason why the market thinks so.
As it stands, both bitcoin and gold suffered during the initial stages of the coronavirus pandemic. Bitcoin sunk from more than $10,000 in February of this year down to the high $3,000 range in mid-March. In addition, gold fell from about $1,700 to $1,300 per ounce. At press time, however, gold has reached a nine-year high and is trading for more than $1,800, marking one of the biggest surges for the asset in a long time.
Schlossberg says that inflation is likely to expand in the coming weeks, and thus central banks will keep rates low and gold is on the verge of striking an even bigger chord. He mentions:
Central banks are still going to have to keep rates extremely low because their first and foremost priority right now in a post-COVID world is to maintain momentum and to maintain expansion as much as possible. They’ll suppress interest rates, inflation will go a little bit higher, and of course, gold loves nothing more than real interest rates going lower.
A New All-Time High?
In 2011, gold reached an all-time high of $1,920.30. He’s confident that the currency is going to surpass that number sometime soon thanks to the rising financial problems banks are witnessing. His words are backed up by Craig Johnson, chief market technician at Piper Sandler, who recently stated:
This has been a ten-year base in the making, and as we’re moving above this $1,800 level, there’s zero question in my mind that we’re going to trade up toward about $1,912… The bigger the base, the bigger the move, and if you measure the height of that base and stand it up, you could have a substantially higher price of gold in here as you start to break out.