Since 2021, bitcoin vs gold, which asset is more inflation resistant? More promising?

Investors have witnessed a wave of crazy bitcoin market, the price once exceeded $28000, and the overall market value exceeded $500 billion. The price of bitcoin fell slightly in the next two trading days, with the price of $26816.27 as of 16:45 Beijing time on December 29. In the era of zero interest rate or even low interest rate, crypto digital currency including bitcoin is temporarily used as an investment asset to “hedge against inflation”. When bitcoin is in high light, its investment price and trend have attracted more and more attention of investors. Gold has been playing the role of a safe house for a long time, but investors are expected to significantly enhance the anti inflation safe house function of the special currency. Bitcoin has risen 270% so far this year. The price of bitcoin broke through $28000 on December 27, and reached a record high of $28365. The market value of bitcoin exceeded $500 billion. After that, bitcoin declined and is now hovering around $27000. Compared with gold, a bitcoin can buy 15.1 ounces of gold at the international gold price of 1880 US dollars per ounce. In an interview with the 21st century economic reporter, Yu Jianing, chairman of the block chain special committee of wind China Communications Industry Association and President of firecoin University, said that although the circulation market value of bitcoin of US $500 billion is a record high, it is not a gateway, but only equivalent to the market value of visa company. This is still a long way from the total market value of 10 trillion US dollars of global gold, so it is not a real milestone. As a digital asset, bitcoin has been highly financial, so the probability rate can not get rid of the “cyclical” financial law, that is, “if there is a rise, there must be a fall; if there is a fall, there must be a rise.”. Bitcoin’s three-month rise since October this year is the longest rise since the middle of 2019, and it is expected to usher in the longest monthly rise in more than a year. It broke the record of more than 28000 at the end of last week, and this situation is two weeks away from its record high of $20000. Bitcoin is up nearly 270% so far this year. Bitcoin’s weekly and three-month price trend chart / chart source: the scale of central bank’s fiscal stimulus is unprecedented under the new situation of coindesk’s safe house coefficient dismantling, including the latest round of US $900 billion stimulus plan approved by both houses of Congress with high votes. Under this ultra loose monetary policy, global inflation expectations have risen, and the market demand for anti inflation assets has increased significantly. “In the period of great economic fluctuations, digital and cryptocurrencies tend to receive more attention.” Yu Jianing believes that the rise in the price of bitcoin is essentially the dividend of the global digital cycle. With the rapid development of global digital economy, the technological evolution and innovative application of blockchain are also accelerating. “The demand for blockchain infrastructure will directly drive the demand for corresponding digital assets, and then drive up the asset price. Bitcoin is the “general equivalent” of digital assets. Therefore, the increase in demand for blockchain platforms and digital assets is expected to lead to the price of bitcoin. ” Yu Jianing said. In addition, blockchain digital assets such as bitcoin have gradually attracted the attention of mainstream investment institutions this year, and have begun to accelerate the integration with the mainstream financial system. Back in October, PayPal Holdings Inc. said it would allow customers to use cryptocurrencies. PayPal announced again in November that it would allow customers to buy, sell and hold bitcoin and other cryptocurrencies online, and that from early 2021, its customers would be able to use cryptocurrency to shop with 26 million merchants on its network. Online auction market eBay is working with lolli, a cryptocurrency centric shopping app, to integrate bitcoin rewards for its 127 million users. DBS also launched bitcoin and other digital asset trading services to institutional investors in November this year. With the help of DBS digital exchange, a digital exchange supported by DBS, enterprises and investors can now tap into the digital currency market with an integrated solution ecosystem. While more attention has been paid to the “coin hoarding” of institutions, the future risks of bitcoin are also being discussed. Although gold’s performance in 2020 is slightly inferior to bitcoin, it is different from high-risk cryptocurrency. Xu Kun, director of China blockchain Application Research Center, told 21st century economic reporter that bitcoin’s rise was driven by the admission of overseas institutional investors. “On the one hand, more and more overseas investment institutions have incorporated bitcoin into their portfolios. For example, ruffer, a British investment management company with a management scale of more than 20 billion euros, holds about 2.5% of bitcoin assets in its multi Strategies Fund. On the other hand, some listed companies have begun to use bitcoin as part of their asset reserves. MicroStrategy has now held more than 70000 bitcoins. “In Xu Kun’s view, bitcoin’s trend towards the mainstream is inevitable. “In the context of global quantitative easing, the scarcity of bitcoin and its low correlation with traditional assets make it a better choice for institutions to diversify investment risks and enhance investment returns, and gradually replace gold as a new reserve asset. At present, the market value of bitcoin is less than one tenth of that of gold. With the admission of more institutions aiming at asset allocation, there is still a lot of room for growth in the value of bitcoin. ” However, she also said that bitcoin is still very small in size, and it needs 10 times more growth space to reach the same size as gold. With a large number of institutions for asset allocation starting to “hoard money”, bitcoin has actually entered a deflationary state. The founder of skybridge capital believes that there is a risk of a sharp fall in bitcoin, which may suddenly plummet by 20% to 50%, so investors must be very cautious. A bitcoin investor told reporters that he recently paid less attention to cryptocurrencies such as bitcoin. “These two months have gone crazy. I’m going to stop and wait for a while.” It is worth noting that since its market value reached $1 billion in March 2013, bitcoin has experienced two cycles of soaring to an all-time high, followed by a cycle of more than 80% decline in value. Bitcoin plummeted in 2017 after a sharp rise. After hitting a record high of $19783 in December 2017, bitcoin then fell 29%, once as high as 38%. On the 31st day after the peak, bitcoin fell below $10000, falling nearly 50% from its high point. For the next two years, its price remained ultra-low. From January to early October this year, bitcoin hovered at a relatively low level of 7000-11000. Since October, bitcoin has risen from $10731 at the beginning of the month to more than $28000. Over the past week, it has changed by about $5600. Song Jiaji, a blockchain researcher at Guosheng securities, told reporters of the 21st century economic report that there may be several preconditions for the lower interest rate compared with the special currency. “First, the lower interest rate means that the yield of risk-free assets decreases and the attractiveness of risk assets increases; second, multiple defaults reduce the attractiveness of fixed income financial assets and increase the attractiveness of equity assets; finally, bitcoin is regarded as equity like assets. If these premises are true, there may be room for bitcoin prices to rise. ” However, if bitcoin ETF is not approved by the US Securities and Exchange Commission (SEC), the listing of cryptocurrency exchanges such as coinbase and the purchase of bitcoin by listed companies are hindered, the price of bitcoin will be under pressure, said Song Jiaji’s team. The emergence of regulatory risk lies in Jianing’s view, it is difficult to accurately predict the specific trend of bitcoin in the short term. “We need to understand the cycle, logic and nature of price development behind it, and pay attention to its trends and impacts in the long run, rather than short-term price fluctuations. The equity mechanism and technological support behind digital assets are significantly different from traditional investment assets. Before investing in digital assets, we must comprehensively and thoroughly study and understand the blockchain technology, distributed business logic and digital financial system, so as to clearly recognize the intrinsic value of relevant digital assets and control the investment risk in essence. ” The supervision, review and identity positioning of crypto digital currencies such as bitcoin, which is still in its infancy, is also an uncertain variable or potential risk. On December 29, coinbase, the U.S. digital asset exchange, said it would suspend trading in the Swiss dollar (SRP) from 14:30 a.m. Western time to 10:00 a.m. on January 19. The currency then fell to around $0.23 from $0.28. Xu Kun said that the SEC has been regulating the crypto asset market in a planned way, and one of the most important points is to determine whether a certain digital asset has security attributes. Howey test is an effective means to determine whether a crypto asset should be regulated as a security. “The U.S. Securities Act provides that issuers seeking to benefit from an initial public offering, including access to retail investors, extensive distribution and secondary trading markets, must comply with federal securities law and must register the offering unless an exemption from registration is applicable.” Yu said. At present, the SEC has not obviously begun to strictly control the special currency or ether currency, but the measures that countries may be ready to take to shrink digital assets need to be paid attention to. At a time when bitcoin prices are close to historic highs, the proposed regulation will regulate cryptocurrency trading entities in accordance with the same standards that require traditional financial institutions. Brothers, I think it’s reasonable: praise, reward and liven up the atmosphere. [praise]

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