In times of economic crisis, investors look for ways to safeguard their assets and ensure value retention. Gold and Bitcoin (BTC) are increasingly viewed as safe havens. The price of gold has hit a new all-time high $64,000 per kilogram. What does this mean for bitcoin? The price of bitcoin has been steadily rising in recent times.
Rise in gold prices due to pandemic
The rise in gold prices can be explained by the economic conditions created by the pandemic, including a recession and currency devaluation. Investors are fleeing from the US dollar to gold, where there is an inverse correlation between the gold price and the dollar index. This is said by, among other things, co-founder of Alpha Capital, Mukesh Jindal. Gold has been seen as a safe haven for investors for centuries and is often used as a hedge against inflation and economic uncertainty.
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Bitcoin as an emerging safe haven
Bitcoin is increasingly seen as an emerging safe haven, similar to gold. This is mainly due to the limited supply, decentralization and transparency offered by the blockchain. Like gold, bitcoin is less vulnerable to political and economic instability, making it an attractive option for investors looking to preserve value and protect their wealth.
It is clear that gold and bitcoin both share important properties as safe havens during economic crises. Investors are looking for ways to protect their wealth and ensure value retention and see both gold and Bitcoin as attractive options. While gold has been used as a safe haven for centuries, Bitcoin is increasingly seen as an emerging safe haven. It will be interesting to see how this trend will develop in the future and what role gold and Bitcoin will play in the global economy.