Many countries are experimenting with Central Bank Digital Currencies.

Bitcoin gained for a third session in a row and hit an intraday high of $31,680.37, according to CoinGecko, marking the highest price since June 1. The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams and are subject to revision over time. Many countries are experimenting with Central Bank Digital Currencies.

Dip-buyers hope to exploit dips by buying at a relative discount and reaping the rewards when prices rise again. Since last November, the market capitalisation of all crypto assets has dropped from a combined $US3 trillion to around $US900 billion. This is Forex news telling you that every dollar invested into gold, at this point in time, has an unusually positive impact on the gold price. The data is volatile, but the implication is that selling by Bitcoin funds has an unusually large downward impact on the price.

Cryptocurrency Promotes Financial Inclusion

Investors are currently fleeing bitcoin and gold amidst a strengthening US Dollar and rising interest rates. This has negatively impacted both – the world’s largest crypto and the precious metal. The declines in price and trading volume show that the cryptocurrency is an insufficient store of value compared to gold, market watchers said.

Investors are fleeing gold and bitcoins

Concerns over transparency and environmental issues have overshadowed Bitcoin’s benefits in promoting financial inclusion. In 2019, we interviewed a series of financially disenfranchised people as part of a grassroots research project on financial inclusion. We met a Venezuelan migrant who had fled her home country to escape the crippling economic mismanagement of the Maduro regime, where the Venezuelan Bolívar had collapsed and hyperinflation was rampant. Equity investors were captivated in mid-April by Coinbase’s market debut as one of the world’s largest financial institutions by market capitalization. Beyond the valuation debate, investors concerned with sustainability are asking big questions about the ESG implications of Bitcoin. He advises those committed to ‘buying the dip’ to decide on a set amount of money they’re comfortable with using to buy BTC or ETH each month and not to worry too much about what happens to prices over the next two years. The principle of ‘buy the dip’ is based on an assumption price drops are temporary aberrations that correct themselves over time.

Is Bitcoin ESG Friendly for Equity Investors?

He never once addressed Bitcoin’s utility as a medium of exchange. In fact, he ceded that quality to Ethereum, arguing that Bitcoin was the “gold” of crypto, representing a store of value, while Ethereum was the “Visa” of crypto, used to make financial transactions. Thiel also ignores the fact that Bitcoin isn’t a productive asset in the way that equities are. A Bitcoin is only worth around $40,000 today because a group of people, many of whom are speculators, have decided that it is. The question of how much Bitcoin, as an asset class, should be worth has long been debated among its backers, and is front and center to Bitcoin’s purpose, which most bulls tend to see as a form of digital gold.

  • The rise of cryptocurrencies in mainstream finance is coming at the expense of gold, says JPMorgan Chase & Co.
  • Lucas Outumuro, head of research at IntoTheBlock, a crypto market analysis firm, agrees that the Fed’s interest rate decisions are playing a prominent role, and isn’t convinced that any price boost to Bitcoin will happen soon.
  • In fact, most dealing in cryptocurrencies ended up on centralised exchanges such as FTX.
  • Bloomberg cites Mark Chandler, chief market strategist for Bannockburn Global Forex, who suggests that a relaxation of those geopolitical tensions could “take the wind out of cybersecurity sails once again.”

Critics point to the high-energy intensity of mining cryptocurrencies. Bitcoin, for example, has the tightest security structure of any cryptocurrency, Investors are fleeing gold and bitcoins which underpins its vast network advantage, and consumes large amounts of electricity to sustain its digital “Fort Knox” status.

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