An In-Depth Look at the Bitcoin/Gold Hedge From Forbes

Bitcoin

Here is a VERY interesting read. In fact, we at FintekNews began writing over year ago about Bitcoin vs Gold. But why can’t gold compete with bitcoin? Well, for one, they aren’t the same. Want to watch a baseball team play against a football team? Both are sports, but you get the point. Also, gold is “old school” and bitcoin is “new school” in the investing/hedging world. One VERY big point in the article cites ease of ownership. Hard to store real gold, right? But wait till gold is “digitized” and you can own digital gold. Hello CME Group and UK’s Royal Mint. Level playing field coming.
Bill Taylor/CEO

“Whenever Geopolitics takes center stage we are used to seeing VIX rise and Gold rise.  While that relationship still exists, it seems as though more and more, Bitcoin is the beneficiary of any global turmoil.

Since May 1, we have had 4 noticeable increases in volatility.  Bitcoin responded much more acutely than gold did to each of those rises.  Now, almost six months later, Bitcoin is up over 15.5% while gold is only up 1.6%.

It could be that these spikes in volatility were quite low on an absolute basis (VIX barely reached 16 the entire summer), so gold, the more mature product didn’t need to react much?  That explanation would be the best from the perspective of gold holders.

Is it because so much wealth has an easier time accessing cryptocurrencies than gold?  That the belief that cryptocurrencies is not as burdened by borders and physical location as gold?  That is a possibility and one that would undermine the use of gold going forward.

Is it just because there is so much more going on with cryptocurrency adoption rates that alternative reasons dwarf any geopolitical concern?  This seems the most plausible explanation to me.  It would also fit into a scenario where those who want to own gold already own it, limiting new flows, while bitcoin is still a nascent ‘product’ to be used as a potential hedge?…”

Full OpEd at Forbes.com