.webp "Bitcoin the new gold?")
The relationship between gold prices and digital money continued late last year as financial experts began trading gold for bitcoin. Experts predict that the pattern will continue despite the recent decline in the Bitcoin price.
Precious metals capital is moving away from bitcoin
Thomson Reuters reviewers noted in their 2017 Gold Survey released in January that higher virtual currency prices in December implied significant corporate action in relation to the precious metal. The paper notes that today's retail speculators have shorter risk horizons and that many have not been able to face the limits of taking action with virtual money.
Progression, the potential flirtation between gold sentiment and the price of digital money, is definitely overdue, said Christopher Looney, strategist at RBC Capital Markets, according to a Fortune report. He said he sees a power relationship between golden sentiment and the digital forex price.
Although there is no previous relationship, Looney said that the trend developed in late 2017 and continued until mid-2018, which indicates that the cost of bitcoin has been wiped out by four figures, and speculators must abandon gold to buy cryptocurrency methods.
Looney noted that the correlation is small: not enough to change the price of gold and not enough to say that financial experts are increasingly considering bitcoin alongside a gold swap. Macro additions that have affected gold prices in general continue to dominate the playing field, along with inventory building.
Looney said he expects gold prices to end at around $303 a year before they start, especially as yields rise.
And a long way to go
In addition to being unpredictable, bitcoin remains an elusive tool that stands out from other sources of speculation. Gold is settled after appraisal with institutional financial experts and has a lot of cash.
While the bitcoin exchange volume was in fact $3 billion, the gold exchange volume reached $250 billion per day, as reported by the Arena Gold Board.
Looney said that the correlation between bitcoin and gold may also grow after a while. The improvement could also happen on the other side, as bitcoin speculators are exchanging their cryptocurrency for gold as a less volatile tool in difficult situations.
In a document sent to the bank's clients in January, Goldman Sachs expert Zack Bundel said that bitcoin's rapid bullish momentum was driven by the increasingly gloomy financial system and modern management of banking institutions.
As cryptocurrency documents evolve over time, and move to a broader class of sources, PandL said that spontaneous financial needs such as Bitcoin may result in lower returns, but may show an anomalous balance and similar and different havens.