Is bitcoin the new gold?

With bitcoin posting uncharacteristically steady growth during the first eight months of the pandemic, the asset’s value shot up during the final two months of 2020 as discussion of institutional involvement provided a strong basis of validation.

For instance, both enjoy strong liquidity and benefit from their status as finite commodities.

While sharing gold’s role as a hedge to broad disruption, it is important not to mistake the main source of bitcoin’s recent momentum.

Though bitcoin certainly shared gold’s role as a hedge during 2020, the main thing the pandemic achieved was bringing the crypto back into the public spotlight.

Further illustrating this departure from the economic contrarianism of gold, bitcoin exchange traded products collected $1.3bn in new assets during Q1 2021.

Overall, the average gold ETP saw $115m outflows during the first three months of the year, while the average bitcoin ETP saw $109m inflows.

Likewise, although exchanges have become more sophisticated in recent years, some will still remember landmark events such as hackers stealing $460m in bitcoin from the Mt.

For one, the crypto’s price is far more volatile than that of gold, and its forecast is less clear.

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