According to Ran NeuNer, founder of OnChain Capital, bitcoin (sometimes referred to as “digital gold“) has outperformed precious metals every year since 2011.
Since 2017, as bitcoin has soared from $4,000 to a maximum of $20,000, the value of an ounce of gold can not compare with 1 BTC.
Based on the huge difference in market capitalization between Bitcoin and gold, Bitcoin has a greater potential for value growth in the short to medium term than gold.
Bitcoin has high liquidity in both the global cryptocurrency exchange and the over-the-counter (OTC) market. Also the open positions of widely used margin trading platforms (such as BitMEX) are close to $1 billion.
Bitcoin’s performance has always been better than gold, and will stabilize for a long period of time. As a traditional safe-haven asset and bond coexist, this may be due to more and more investors admit that Bitcoin may evolve into The main alternative value storage method.
However, contrary to popular belief, Bitcoin failed to prove the characteristics of safe-haven assets until 2019. It does not show an inverse relationship with the global stock market, nor does it follow the price trend of gold and bonds.
Nonetheless, financial institutions such as Bakkt and Fidelity, which are part of the ICE subsidiary of the New York Stock Exchange’s parent company, have demonstrated significant recognition of Bitcoin and significant support from institutional investor infrastructure. The cryptocurrencies are more attractive to wider investors.
As many investors remain cautious about various geopolitical risks, gold is expected to remain stable. Whether this environment will allow Bitcoin to continue to outperform gold in 2020 remains to be seen.