In today’s reflection we will ask whether Gold has more press than Bitcoin, or whether investors are choosing it as a safe haven asset because it is a safer investment. There is no doubt that Gold has been a safe haven asset for centuries. In the subprime crisis of 2008, the precious metal passed the $2,000 barrier, a value that could reach or even surpass this very year.
On the other hand, Bitcoin is a digital asset with barely 11 years of life, which is gaining more followers every day, due to 2 qualities that make it unique:
You own your bitcoins, no one can take them away from you. It’s like being your own bank.
It is a scarce good. Only 21 million BTCs will be issued, not one more nor one less.
Bitcoin vs. Gold
For years, there has been a debate about whether Bitcoin and Gold are the best active safe havens to preserve our money, and why not get some interesting returns.
Personally, I think that both Bitcoin and Gold are very interesting to take refuge in times of turbulence, like the ones we are living right now.
Now, the question today is: Does Gold have more press than Bitcoin? The answer is absolutely YES. Bitcoin is not very popular, but gold has been in people’s minds for centuries.
Whenever Gold reaches its peak, it is reflected in most places around the world, creating a kind of “gold rush”. And that’s okay, throughout its history it has proven to preserve the value of money.
At the time of writing, one ounce of spot gold is traded for US$ 1,804, according to the online broker Plus500.
Can crypto-currencies benefit from the global economic meltdown?
Bitcoin, for its part, continues to struggle to stay above US$9,000, with a marked short-term lateral trend. However, since the beginning of the pandemic, its performance has been spectacular, even superior to gold.
Bitcoin’s performance over the last 3 months is 27.2%, while Gold is up 7.6%, as you can see in the chart below.
Forecasting the future of the price of gold
Recently Michael Novogratz, in an interview with CNBC said:
“The macro configuration is so perfect for something like gold.”
“The Federal Reserve and central banks around the world continue to print money: more money, more money, and more money. And so, Gold is going to eliminate the old highs, $1,950 or so, and continue. I think we are just beginning this movement,” Novogratz said.
On the other hand, Michael Howell, CEO of Crossborder Capital said:
The U.S. Federal Reserve and China’s central bank injecting money into the markets was “magic news” for the yellow metal, and predicted that gold prices could rise by up to 50% in the next 18 months to reach $2,500 per ounce.
Finally, Peter Boockvar of the Bleakley Advisory Group said in a research note that he believes this would put gold within touching distance of an inflation-adjusted record.
He argued that gold’s 1980 high of $850 per ounce would be around $2,600 per ounce by 2020 when adjusted for inflation.