The king of cryptos superior to the king of metals?
Is Bitcoin (BTC) increasingly being seen as a better safe haven than gold itself? At least that’s what a managing director of Deutsche Bank seems to think.
Bitcoin, a „credible“ asset preferred to gold?
According to the ZeroHedge site, which reports the comments of Jim Reid, head of the British branch of Deutsche Bank, Bitcoin is on the way to supplant gold in the hearts of some investors.
In an analysis of world markets, one week after the announcement of a possible vaccine against Covid-19, Jim Reid notes a significant decorrelation between the price movements of precious metals and those of Bitcoin:
„One of the quirks [in the markets] was the dramatic divergence between gold (-3.6 percent) and silver (-4.4 percent) on the one hand, and Bitcoin (+13.4 percent) on the other. Bitcoin rose another 3% overnight and seems to be creating its own momentum. It has grown by more than 70% in the last six weeks as more and more investors are starting to see it as a credible asset to invest in.
The king of cryptos and the inflation debate
In observing this dissonance among these assets considered as reserves of value, Jim Reid even goes so far as to say that :
„There seems to be a growing demand for the use of Bitcoin, where gold was previously used, to hedge against dollar-related risks such as inflation and other things. »
Indeed, an ever increasing number of billionaires consider the king of cryptos as an alternative to gold as a safe haven: Bill Miller, Stanley Druckenmiller, Ricardo Salinas Pliego,… And the list is not exhaustive!
Even if their degree of preference in gold or Bitcoin may differ slightly, they are all unanimous in their fears about a hyperinflation of the US dollar.
Given that many policies call for ever more economic interventionism, and thus monetary printing, this trend of mistrust (not to say distrust) of fiat currencies is not likely to be reversed any time soon. While gold as a proven safe haven will certainly benefit from this, it would seem that the little newcomer – Bitcoin – is now seen as an even more promising protection.