The time has come when traditional gold may be surpassed by the modern treasure – Bitcoin. New reports suggest that cryptocurrency might not only compete with gold as a store of value but surpass it.
The gold market has been put on alert by the rising popularity of Bitcoin (BTC) among institutional investors. From the Matrixport report, a platform offering comprehensive financial services related to cryptocurrencies, it appears that Bitcoin has the potential to challenge gold’s position as a store of value. The reason for this position is that, over recent years, Bitcoin has outperformed gold. Moreover, the demand for Bitcoin has significantly increased over the past year, despite huge losses caused by the collapse of FTX and Alameda Research, which resulted in losses exceeding 30 billion dollars for the young industry.
An interesting aspect is that more than 10 funds with a total capitalization exceeding 17 trillion dollars have approached the U.S. Securities and Exchange Commission (SEC) to offer a Bitcoin-based product called ETF (Exchange-Traded Fund). What’s more, the SEC lost a case against Grayscale Investments, failing to present sufficient evidence as to why it couldn’t convert its GBTC product into a Bitcoin-based ETF. As a result, experts believe that the chances of approving a Bitcoin-based ETF in the next six months have significantly increased.
Why does Matrixport believe that Bitcoin is better than gold? The answer lies in the advantages of cryptocurrency. Bitcoin has a greater potential to become a global store of value than gold. It’s a better tool for international transactions than gold, which requires numerous regulations and formalities. Additionally, Bitcoin is more versatile and offers high-quality services at a better price.
Markus Thielen, the chief analyst at Matrixport, notes that “storing value in the form of gold has become obsolete in the digital age.” Moreover, he observes that “Bitcoin offers a solution to this dilemma, allowing for fast and discreet transfers of value across borders.”
One cannot ignore the global context where Bitcoin is increasingly used by various countries to circumvent international sanctions. Considering current conflicts, such as those between Russia and Ukraine or Israel and Gaza, which have impacted the global oil and gas market, Bitcoin emerges as an attractive alternative.
Although Bitcoin is characterized by greater volatility caused by global investors’ speculation, Matrixport predicts that its market capitalization might soon surpass gold’s.
The current market value of Bitcoin oscillates between 500 and 600 billion dollars. Experts from Matrixport believe that after the approval of the Bitcoin-based ETF, over 30 billion dollars might flow into the market. Currently, the Bitcoin market is awaiting the so-called halving, which occurs every few years and which, according to analysts, could be a catalyst for the next bull run in the cryptocurrency market.
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