Why gold grows faster than BTC
Gold prices keep going up and are headed for a new highest level of US$1725 per ounce. At the same time, Bitcoin remains volatile and is slowly losing value.
So far in 2020 gold has gained 14% this year demonstrating a great performance while the stocks are going down. Bitcoin lost 4.1% in 2020. Both BTC and gold are considered to be one of the best ways to protect the funds from inflation. So some traders might ponder the question of why are their price dynamics so different?
Chief investment officer at Arca Funds Jeff Dorman believes, that the biggest reason for the disparity is habits. Gold remains the most well-known and tested stable investments. It is reassuring and even pleasant to own, because of its universal associations with wealth and status. By rough estimates, the market value of the precious metal is currently at around US$11 trillion.
It is also much easier to acquire than Bitcoin. A major part of wealth owners have at least some experience with precious metals but still have to do extensive research to efficiently operate with BTC.
The demand for safe-haven commodities continues to grow. The IMF has warned, that the global economy might experience the worst recession since the time of the Great Depression and the reduction of the global GDP by around 3%. Meanwhile, the Federal Reserve has hinted at further cash injections. Its balance sheet has surpassed US$6 trillion for the first time in over 100 years. During this crisis, traders are likely to search for safe investments.
Bitcoin might still get in on the growing demand. Its performance partially depends on the results of halving, that is scheduled to happen on May 13.