Investors are torn between using Gold or Bitcoin to protect assets from inflation
Due to inflation fears, investors are searching for a way to preserve their wealth and assets. This has made the stock market unpredictable and has led to a steady increase in the value of Gold. But in an unexpected twist, Bitcoin’s value is currently higher than Gold’s.
According to Data, Gold prices are lower than it was around this period in 2019, while bitcoin is currently trading at 70% above its last year value. This has led investors to be indecisive about the instrument to hedge their losses against.
Gold is usually the investment instrument of choice for investors
Gold has always been used to protect assets from inflation because it is finite and cant be produced by the government. Some investors are choosing it over bitcoin because of the cryptocurrency’s unpredictability. According to a report written by a senior analyst, Bitcoin does not offer the stability that Gold offers to investors.
There are currently fears of inflation because of the new proposed stimulus Bill that Biden proposed to the senate. Investors are questioning the need for the stimulus now that there are vaccines available and Americans are returning to the workplace.
There is concern that the huge flow of cash into the economy might shift the economy closer to inflation. The market’s concern is responsible for the current increase in Gold prices.
Some investors view Bitcoin as an excellent alternative to Gold
Bitcoin and other cryptocurrencies have been seen as an alternative to Gold since the crypto market has continued to beat the market’s expectations. According to a market strategist, Bitcoin is better than Gold at offering better interest rates.
The market analysts added that even though inflation usually increases rates, the increases are unpredictable and might ultimately reduce the value of Gold. He cited cryptocurrencies as a better option than Gold.
Bitcoin has continued to surge in value because more people and investors are seeing its potential. The digital currency is also seen as an investment tool because its more finite than Gold and other traded metals.