[2018-03-04]Forbes:Bitcoin is replacing gold as a hedge against uncertainty mark

[vit05]

Two Bullish Signs For Bitcoin
     

Panos Mourdoukoutas , CONTRIBUTOR
 
Opinions expressed by Forbes Contributors are their own.
 
Shutterstock

After a prolonged correction, Bitcoin is back big time. The “people’s currency” gained close to 7% this week, stabilizing around the $11,000 mark.

Is this comeback for real?

Hard to say, as there are hardly any “fundamentals” to judge whether Bitcoin is undervalued or overvalued at these levels. Still, there are a couple of bullish signs for the digital currency worth noticing.

One of them is that Bitcoin is beginning to behave like the ‘new gold,’ shining in times of extreme uncertainty that take over Wall Street.

There was a time when gold would shine as Wall Street faltered. That was long time ago, when it was the hedge against uncertainty. It was the asset where investors could park their cash in times of political and economic turmoil.


Now Bitcoin is taking its place, as evidenced by the performance of the two assets overtime.

Bitcoin, for instance, rallied last week, as conventional gold and stocks faltered, due to anxiety over the direction of interest rates and world trade. The “people’s currency” gained 13.95% in early in the week and 22.81% in the last 30 days. Meanwhile, the SPDR Gold Trust lost 2.31% and 2.51% over the same period, and the S&P500 lost 3.53% and 4.93%.

Investment   5d   30d
Bitcoin   +13.95*   22.81
SPDR Gold Trust   -2.31   -2.51
SPDR S&P 500   -3.53   -4.93
Thursday March 1, 2018 at 3pm

Bitcoin displayed a similar pattern last year. It rallied as North Korean dictator Kim Jong-un was launching missiles over Japan, and as China was trying to write its own navigation rules in South China Sea.

https://www.forbes.com/sites/panosmourdoukoutas/2018/03/02/two-bullish-signs-for-bitcoin/#7095f5166383

[tee-rex]

Two Bullish Signs For Bitcoin
     

Panos Mourdoukoutas , CONTRIBUTOR
 
Opinions expressed by Forbes Contributors are their own.
 
Shutterstock

After a prolonged correction, Bitcoin is back big time. The “people’s currency” gained close to 7% this week, stabilizing around the $11,000 mark.

Is this comeback for real?

Hard to say, as there are hardly any “fundamentals” to judge whether Bitcoin is undervalued or overvalued at these levels. Still, there are a couple of bullish signs for the digital currency worth noticing.

One of them is that Bitcoin is beginning to behave like the ‘new gold,’ shining in times of extreme uncertainty that take over Wall Street.

There was a time when gold would shine as Wall Street faltered. That was long time ago, when it was the hedge against uncertainty. It was the asset where investors could park their cash in times of political and economic turmoil.


Now Bitcoin is taking its place, as evidenced by the performance of the two assets overtime.

Bitcoin, for instance, rallied last week, as conventional gold and stocks faltered, due to anxiety over the direction of interest rates and world trade. The “people’s currency” gained 13.95% in early in the week and 22.81% in the last 30 days. Meanwhile, the SPDR Gold Trust lost 2.31% and 2.51% over the same period, and the S&P500 lost 3.53% and 4.93%.

Investment   5d   30d
Bitcoin   +13.95*   22.81
SPDR Gold Trust   -2.31   -2.51
SPDR S&P 500   -3.53   -4.93
Thursday March 1, 2018 at 3pm

And what is the second sign?

Also, I, for one, think that this evidence, which allegedly proves that bitcoin is taking place of gold, is no more than wishful thinking at its worst. There is nothing which could be interpreted as gold being substituted with bitcoin as a hedge against uncertainty. You can find literally thousands of trash stocks that would greatly outperform gold now and then, but there is neither rhyme nor reason to assuming they are beginning to behave like the "new gold". Rising a dozen percent with gold going down a little doesn't make bitcoin into digital gold.

[chenbo*)]

With bitcoin being so volatile, I am not so sure if it is really such a safe bet compared to gold. The one thing I am betting on though is that bitcoin still hasn't peaked. What we saw at the end of last year is just icing on the cake. Whatever is the publications agenda, they sure helped in ensuring that bitcoin's price would be on the up for the coming weeks.

[tee-rex]

With bitcoin being so volatile, I am not so sure if it is really such a safe bet compared to gold. The one thing I am betting on though is that bitcoin still hasn't peaked. What we saw at the end of last year is just icing on the cake. Whatever is the publications agenda, they sure helped in ensuring that bitcoin's price would be on the up for the coming weeks.

This is what hopes are for. We all hope that bitcoin hasn't yet peaked, but the outlook for it is not very cheerful in general. Many people had bought into the December rally, while the longer bitcoin remains at its current levels, the more inclined all these people will be to sell their coins whenever bitcoin tries to move higher. Maybe we need another major crash to make the bag-holders sell at a loss so that there wouldn't be a lot of resistance on the way to new highs in the future.

[strasboug]

bitcoin can not replace the gold, it possibly just supplement gold.

[richardsNY]

bitcoin can not replace the gold, it possibly just supplement gold.

No worry, it won't, and doesn't need to. Bitcoin is definitely part of a new asset class, but not in such a way that it replaces gold. I however do think that where traditionally gold is being used as hedge, people have now another option to go for, and that's Bitcoin. I don't understand why people think it's necessary for Bitcoin to replace financial institutions, gold, etc. Everything can function alongside each other without any problems. Main point of importance is the fact that with gold, you for sure know that it will stay as it is for many more decades, which at this point in time can't be said about any crypto currency. Let's wait 10 years to see where crypto stands, and then see how everything has played out.

[aeternus]

bitcoin can not replace the gold, it possibly just supplement gold.

No worry, it won't, and doesn't need to. Bitcoin is definitely part of a new asset class, but not in such a way that it replaces gold. I however do think that where traditionally gold is being used as hedge, people have now another option to go for, and that's Bitcoin. I don't understand why people think it's necessary for Bitcoin to replace financial institutions, gold, etc. Everything can function alongside each other without any problems. Main point of importance is the fact that with gold, you for sure know that it will stay as it is for many more decades, which at this point in time can't be said about any crypto currency. Let's wait 10 years to see where crypto stands, and then see how everything has played out.

I agree bitcoin does not need to replace any institution or other currencies for everyone as long as it does for some then that is more than enough, I do not have gold but I have a small amount of silver but I find holding bitcoin easier and the profits are bigger too so I prefer to use bitcoin as a hedge against the system, and as long as some of us are able to do that then everything will be fine.

[prehisto]

As we all know the volatility is enormous in the past 4 months and this factor contradicts the "new gold"statement and in my view is a big overstatement.
But i have to agree that BTC grows when large geopolitical events occur and will do so .

[TraderTimm]

As we all know the volatility is enormous in the past 4 months and this factor contradicts the "new gold"statement and in my view is a big overstatement.
But i have to agree that BTC grows when large geopolitical events occur and will do so .

Oil and Twitter (the stock) is more volatile than Bitcoin.

Forbes is trying to wrap their ossifying grey matter around the idea of cryptocurrencies, but they can't find a convenient box to put it in.

Digital scarcity of an asset that is essentially a "Digital Bearer Bond" has utility beyond a physically cumbersome dinosaur coin/bars/ingots. What I personally find hilarious is that even with the sabre-rattling of the Soviet Union and North Korea, Gold can't even manage a rally to $2,000 - its been languishing for quite some time. Pathetic.

[tee-rex]

As we all know the volatility is enormous in the past 4 months and this factor contradicts the "new gold"statement and in my view is a big overstatement.
But i have to agree that BTC grows when large geopolitical events occur and will do so .

Oil and Twitter (the stock) is more volatile than Bitcoin.

Forbes is trying to wrap their ossifying grey matter around the idea of cryptocurrencies, but they can't find a convenient box to put it in.

Digital scarcity of an asset that is essentially a "Digital Bearer Bond" has utility beyond a physically cumbersome dinosaur coin/bars/ingots. What I personally find hilarious is that even with the sabre-rattling of the Soviet Union and North Korea, Gold can't even manage a rally to $2,000 - its been languishing for quite some time. Pathetic.

The strength of gold is in inverse relationship with the strength of the American dollar. Gold was spiking in 2011 when the Federal Reserve ran its quantitative easings and people expected a dollar inflation of magnificent scale to arrive soon. It didn't happen and then gold plunged something like 40%. In this way, don't expect that gold will skyrocket in the future unless the dollar depreciates really strong.