Rising gold value - will it reduce Bitcoin's attractiveness ?

[DrBeer]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

[Don Pedro Dinero]

What is your opinion on this issue ?

I don't think it reduces the attractiveness of bitcoin. If we look at the long term, and according to curvo.eu bitcoin has appreciated by 63.6% per year on average over the last 10 years, giving a cumulative return of 13,616.3%, while gold has appreciated by 8.8% per year over the same period, giving a total return of 133.3%.

If we zoom out we can see that bitcoin has been 10 times more profitable. It will not necessarily continue to be so in the future but everything indicates that in bitcoin vs gold, bitcoin will continue to be the clear winner, apart from the fact that the world has shifted everything to digital.

Which is better, a paper map or google maps? Cassettes and CDs or Spotify? Etc.

[_act_]

Gold was $2060 at the beginning of this year. Its price now is around $2508. That is 1.217x increase.

Bitcoin was $42700 at the beginning of this year. Bitcoin price now is around $59400. That is 1.39x increase.

Despite that bitcoin is having a bear time, it still increase more than gold this year.

[ultrloa]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

I don't think so Bitcoin and Gold have different market so for sure Bitcoin attractiveness will remain despite of Gold price is increasing. Same goes with if Bitcoin price goes up demands for gold will remain.

Don't know why there's need to compare it since we see how big the demands gotten by these two asset. If gold investor would know that there 's another asset like bitcoin exist and they see some great potential from it then provably that they join us here. The same with traditional gold it goes same way since people usually find good opportunity to gain since most of investors doesn't like see their money sleeping in their wallets or bank accounts.

But I'm more into Bitcoin then left something for gold since I guess having we could maximize our investment then something good profit return in future.

[The Sceptical Chymist]

If we zoom out we can see that bitcoin has been 10 times more profitable. It will not necessarily continue to be so in the future but everything indicates that in bitcoin vs gold, bitcoin will continue to be the clear winner, apart from the fact that the world has shifted everything to digital.

A pearl of wisdom in finance is that you can't judge what an asset is going to do in the future based on its past performance--and though you qualified your statement with the bolded part above, I'd wager that a lot of members here base their crypto purchases by looking at charts.  Sometimes it works, but it's a fundamentally flawed method of investing.

Nevertheless, I agree that bitcoin will most likely outperform gold in the long-term.  Yeah, gold is flying high right now, but that's because there's a whole lot of guessing games being played regarding interest rate cuts, upcoming election results, and some other economic indicators that might go one way or another.  Assuming things settle down, gold will probably plateau or drop in value.  It just isn't a good investment; it's a hedge against uncertainty (and inflation, if you believe that).

[Fiatless]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

It is common for people to invest in safe-haven assets such as gold during inflation and increases in interest rates. In this time of economic uncertainties, investors tend to invest carefully and also avoid taking risks. So it is not surprising the gold price has continually appreciated since this year.

But it doesn't mean that it will greatly affect investment in Bitcoin since both sectors have their separate markets. Gold is usually favoured by Generation X  and Baby Boomers, while Millennials and Generation Z will prefer to invest in Bitcoin. But investment in Bitcoin will increase immediately the economy begins to recover maybe later this year.

[Solosanz]

Gold is proving to be the best asset during crisis and major political/economic problem, that's what people think because the gold price increase during that time while the other assets including Bitcoin are declining.

This is actually a bad news, the majority didn't think Bitcoin is the safest asset, instead they buy digital gold.

Honestly I want to wait till the company who offer to trade digital gold went bankrupt, so people will learn that digital gold isn't same to gold.

I don't believe during crisis, most people at the same time go to pawnshop to buy gold...

[slapper]

Gold hitting $2,500 an ounce is significant. People are scared, running to the oldest safe haven they know. Some say it's going to $2,700. Maybe, but wake up. Gold going up, Bitcoin going down - that tells you everything you need to know about where we are. Fear is driving the market, not logic. Following the herd into gold? That's a sucker's play. Think bigger. The future economy isn't about gold, it's about what comes next

Economic cycles exist and it keep running and running. But that doesn't mean you just sit back and watch. You adapt, you anticipate. Gold's hot now, but don't get tunnel vision. Crypto, tech, who knows what's next? The real play is understanding the flow of money, not just reacting to it

[davis196]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

Yes, the gold price will keep raising. The US dollar will keep losing value in the long term. Dedolarization is a thing and the BRCIS countries would keep buying bigger amounts of gold. The day traders and unexperienced investors are expecting a recession and putting their money into the most well known safe heaven asset. There's global uncertainty and we are also heading towards the US presidential election.
The rising price of gold has nothing to do with BTC. Bitcoin isn't a safe heaven asset(not in the short term) and the investors, who are moving away from risky assets won't invest in a volatile asset like BTC. I'm still bullish about BTC in the long term, because I think that the Federal Reserve will start decreasing the interest rates in the next few months. The expectations of a global recession might not happen.

[pooya87]

The main reason for gold rising up (which will continue) is because central banks and governments are buying gold at large quantities to use as a safe asset due to increasing global tensions (not exactly due to global economy situation).

As for its affects on bitcoin's attractiveness, I don't think it has any. People who buy bitcoin are doing it because they either want to reach financial sovereignty, or they want to diversify (have both gold and bitcoin) so they don't choose one or the other, they choose both.

Besides, bitcoin's potential to grow is far larger than the gold's potential to grow. Just look at the history. The 20% you said about gold rise potential is like reaching $71400 for bitcoin, a price that we had already seen not so long ago.

[DrBeer]

What is your opinion on this issue ?

I don't think it reduces the attractiveness of bitcoin. If we look at the long term, and according to curvo.eu bitcoin has appreciated by 63.6% per year on average over the last 10 years, giving a cumulative return of 13,616.3%, while gold has appreciated by 8.8% per year over the same period, giving a total return of 133.3%.

If we zoom out we can see that bitcoin has been 10 times more profitable. It will not necessarily continue to be so in the future but everything indicates that in bitcoin vs gold, bitcoin will continue to be the clear winner, apart from the fact that the world has shifted everything to digital.

Which is better, a paper map or google maps? Cassettes and CDs or Spotify? Etc.

The comparison of percentages is certainly revealing, but somewhat incorrect. Gold rules the financial market - for millennia. Bitcoin is not full 20 years....  Gold does not have such wild volatility, unlike bitcoin. Gold is accepted by all countries, bitcoin - a small number ... And there are many such differences, and not all of them in favor of bitcoin, let's be realistic.

About the cards and the CD. That's a great comparison, but... How far will you go on google maps, if you have a dead cell phone or no signal A-GPS / GPS ? Do you get the same pleasure listening to cassettes as a theater with a live orchestra ? Do you like soy meat or fresh tasty real steak ? And which tastes better - fine New Zealand wine or Coca-Cola ?  Such examples can be given all the time, and in the end we will realize that there are no perfect solutions, there are solutions more suitable for some situations.

[Iranus]

What is your opinion on this issue ?

I even believe that gold will be able to reach 3k if our economy enters a recession but that alone is not strong enough for gold to reduce bitcoin's appeal.

From what I see, both gold and bitcoin have their own loyal investors and supportive communities. What gold investors look for is stability, they accept low but safe returns. Meanwhile, bitcoin investors are willing to accept risks to seek greater profits, so a profit of 20% seems insignificant and not attractive enough for them. It can be seen that the investment thinking of gold and bitcoin investors is completely different, so I think that even if gold increases further, it will be difficult to change the thinking of bitcoin investors.

I guess what bitcoin investors are looking for is x2, x5 or more returns, so even a 50% return still doesn't appeal to them, IMO.

[Wapfika]

This is an old news but I think gold trend is just because of the central bank led by China hauling it to ease reliance on US Dollar before[1]. Now with the introduction of BRICS currency backed by gold the price keeps skyrocketing but this doesn’t a big issue for Bitcoin since they are different type of assets. Bitcoin is a digital currency while Gold is a precious metal which investors can always diversify investments.

Maybe silver market can be affected but I doubt Bitcoin popularity will be affected since Bitcoin still has the volatility which many investors looking forward for a better profitability.


[1]-https://edition.cnn.com/2024/04/09/economy/gold-prices-record-highs/index.html

[serjent05]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

No, the rising value of gold won't reduce Bitcoin's attractiveness.  Many say Bitcoin is a digital gold reason why many compare Bitcoin to gold but I believe it is like comparing oranges to apples.  But for the sake of comparison, I believe Bitcoin is more than gold as it is said that Bitcoin is more than just digital gold.

Bitcoin enables financial inclusion which gold can't do.  Bitcoin makes boundless transfers cheaper and more accessible which gold can't do.  Bitcoin brings a financial revolution which gold can't do.  So no matter how gold has risen in value, it can't compete with the feature of Bitcoin which has its own market.

[Lida93]

Gold thrive in global economic crisis periods  and over history people have known to hedge their funds in gold to preserve value when they anticipate an impending showdown.  Perhaps this new record could have been accentuated by the news about the US Fed plan to cut down interest rate any time soon. https://businessplus.ie/news/federal-reserve-rate-cuts/
Away from the bright side the price can fall long too assuming there's a change of plans by the Fed about the cut because it's just the fear of investors that is driving the price of gold up. The trajectory doesn't appear to stay that long  and that's why I don't think it can affect the attraction of bitcoin since the bitcoin market has its own uniqueness for it's investors.

[skarais]

Bitcoin investors will continue to buy bitcoin and will likely continue to accumulate as long as they have the opportunity. The purchasing power of gold has indeed increased which has caused the price to rise drastically as it is now, but in my opinion bitcoin investors will not give up on bitcoin and instead buy gold because of the price spike. Bitcoin's purchasing power will increase over time and will likely reach a new ATH again sometime in the remainder of 2024 or 2025, but I don't think gold's increasing purchasing power will have a significant adverse impact on bitcoin.

I like to diversify including buying bitcoin and gold, so I have both short and long term plans. So I don't think the impact of rising gold will worsen the condition of the bitcoin market which so far is expected to recover. The price of bitcoin is still around $59,500 and still has the potential to break through strong resistance in the remainder of this month and next month.

[TheUltraElite]

Bitcoin and gold are not comparable so it will maintain its position no matter what happens to gold, they are both different asset classes.

Also if Gold prices are rising then by logic, you dont buy it, but sell to make the profit and buy when it comes back down again, unless you want to flip quickly after buying. Gold also faces cycles like bitcoin and this is just one of them happening. We know how to ride these cycles and not get distracted by them.

A good portfolio should have both gold and bitcoin among others and make it a point to buy each asset when it drops below a set target.

[m2017]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

Price growth is never constant and eternal.

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

This can already be called a "traditional" model of investor behavior, when, against the backdrop of an unstable global economy, money flows into gold as a protective asset.

What is your opinion on this issue ?

Despite the fact that due to the endless emission of money all over the world, there is still a limited amount of money (backed by value) on the planet. Therefore, if we proceed from the "theory of connected vessels", then if the inflow of investment money into gold has increased, then the inflow of money into bitcoin should decrease. Also, I assume that against the background of the fall in the bitcoin's price relative to the peak values ​​in recent times and the increase in the cost of gold, it makes gold a more attractive investment instrument in the eyes of investors. Why invest in an asset that is getting cheaper instead of one that is getting more expensive and increasing profits? (this is the view of frivolous investors).

[avikz]

Gold prices have reached a new record above $2,500 per ounce. Investors expect that gold prices may rise further. Since the beginning of the year, the price of gold has risen by 20% and could reach $2,700 per ounce by the end of this year (2024).

At the same time, we must take into account the unstable state of the global economy, we can assume that investors will continue to invest in gold to the detriment of investments in cryptocurrency and specifically bitcoin.

What is your opinion on this issue ?

I don't think gold price increase will have an impact on Bitcoin. Because these two assets are loved by two different sets of investors. Gold is a traditional investment and you will mostly find traditional families and non-risk takers investing in them.

It is totally different for Bitcoin. If you look at the crowd that invest in Bitcoin, majority of them are risk takers, unlike gold investors.

So honestly I don't see an impact. A lot of investors will have both of these assets in the portfolio.

[DrBeer]

What is your opinion on this issue ?

I even believe that gold will be able to reach 3k if our economy enters a recession but that alone is not strong enough for gold to reduce bitcoin's appeal.

From what I see, both gold and bitcoin have their own loyal investors and supportive communities. What gold investors look for is stability, they accept low but safe returns. Meanwhile, bitcoin investors are willing to accept risks to seek greater profits, so a profit of 20% seems insignificant and not attractive enough for them. It can be seen that the investment thinking of gold and bitcoin investors is completely different, so I think that even if gold increases further, it will be difficult to change the thinking of bitcoin investors.

I guess what bitcoin investors are looking for is x2, x5 or more returns, so even a 50% return still doesn't appeal to them, IMO.

Yes, there were and are nuances for bitcoin investors, from volatility to the high risks of the crypto market itself. And only those who are ready to play “long term”, hoping for crypto market cycles, where you can count on another price hike, for example, in 3-5 years, will most likely invest there (in cryptocurrency). Gold gives an opportunity not to “freeze” money for such a long period of time, in order to get a profit, although it is cheaper