Why Bitcoin Is Referred As ‘Digital Gold’

Contents

Bitcoin looks more like digital gold – Bloomberg
CONTENT

  • Coronavirus plays into the hands of bitcoin.

  • Bitcoin will stop being a highly volatile asset.

  • US Federal Reserve may ease its CBDC policy if these assets are more efficient than fiat.

International consortium of news organizations, developing transparency standards.

Bloomberg Intelligence Research Department Assesses Bitcoin’s Position In The Market In A Global Recession.

Despite the collapse of the largest cryptocurrency by almost 30% in March, on an annual basis, Bitcoin sank by only 6%.

Bloomberg experts note the positive macroeconomic effect of the coronavirus on Bitcoin compared to other cryptocurrencies.

“We believe that this year will see the transition of bitcoin from speculative assets at risk to the cryptocurrency version of gold,” analysts from Bloomberg said..

Analysts believe that stock market volatility will only increase over time, while Bitcoin will cease to be a risky asset.

Bitcoin looks more like digital gold - Bloomberg

Despite the fact that the annual volatility of bitcoin is on average about 5 times higher than that of the S index&P 500 last year, cryptocurrency was down just 5% in 2020 versus nearly 22% for the stock index.

“For nascent cryptocurrencies, this indicates a transition to gold-like status, maturity and performance,” experts emphasize..

Only emission affects the price

The rise in interest in Bitcoin futures represents “mainstream adoption” that Bloomberg believes will continue to weigh on cryptocurrency volatility while prices rise..

Bloomberg is confident that it is the limited supply of bitcoin that affects the supply and demand model, which determines the price of the cryptocurrency..

Bloomberg also predicts a key role for commercial banks in the emergence of digital currencies of central banks (CBDCs)….

Bitcoin looks more like digital gold - Bloomberg

More).

Fed is worth moving over

Coronavirus-related economic downturn could spark Fed interest in an instrument that could provide more direct stimulus beyond financial markets.

Bitcoin looks more like digital gold - Bloomberg

At the same time, the publication’s experts believe that this will require changing legislation..

At the same time, central banks around the world may also adjust their CBDC development strategy if private initiatives like Facebook’s Libra begin to gain traction..

The Fed may need to be more accommodating to regulated private digital money if alternatives such as Bitcoin can confidently overcome the coronavirus.

What do you think? Can Bitcoin Become Digital Gold Despite Its Volatile Properties? Share with us with our thoughts in the comments.

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