Is Bitcoin Solid Enough to be a go Against Gold?
Has the bitcoin bubble burst? Let’s say it did for the sake of theory. Bitcoin peaked at almost $5,000 earlier this year and then immediately sank down. It is now around 16% lower than that number at just above $4,000 at the time this article was written. Let’s say that it continues to decline over the next few months and doesn’t meet its valuation. Could this become the end of bitcoin and the bubble bursting?
This vision could be a possible place for bitcoin to go. Looking at the trends from hold during its peak in January of 1980, it has maintained a similar trend to the aforementioned one.
The market has been extremely volatile regarding these currencies since in the scheme of things, are quote recent. With conventional digital currencies arising the market seems like it may be going up as well. Given that these currencies are relatively new, it is only fair that they are extremely volatile. However, the volatility has only served to send some investors away as they don’t feel like it is a safe investment.
If one bought a bunch of various digital currencies and decided to hold them alongside stock in gold as the negative-beta part of the equation, would that lead to gains due to their correlation? This is obviously not the case if all digital currencies are seen to be worth nothing in five years or so, but say that they continue to increase in legitimacy as well as value. This could potentially be a smart move for one’s portfolio.
Gold is a currency that has genuine value given its physical backing and time period of that value. Those who don’t like the idea of investing in cryptocurrency have used that reasoning to demote it, but that is simply not true. As bitcoin arises in popularity, so does the amount of physical uses it can have.
With digital currencies on the rise, the question continues as to whether or not it will remain a solid investment for time to come.