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Germany’s largest bank, Deutsche Bank, recently revealed that more people now prefer Bitcoin over gold to protect their money.
In a note credited to Zerohedge, the financial giant of Europe’s largest economy, he revealed that investors consistently view Bitcoin as a legitimate reserve option.
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What they are saying
Deutsche Bank research strategist, Jim Reid, provided key insights into what is changing investors to see Bitcoin more as a tool to protect their cash better than traditional safe-haven assets like gold.
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“Bitcoin is up another + 3% overnight and appears to be creating momentum of its own. It has risen by more than 70% in the past six weeks as more and more investors are starting to see it emerge as a credible asset to invest in. There also seems to be a growing demand to use Bitcoin where gold was used to hedge dollar risk, inflation and other things,“Reid said.
Bitcoin’s strong performance is not a shock to some analysts, especially in the context of the benchmark cryptocurrency which shows high correlation with global equity markets.
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“Given that stocks are now close to, or in some cases higher than, the highs reached in February, it is not surprising to see BTC doing the same. ” She said Ryan Watkins, BTC analyst at Messari.
Why compare BTC yields to gold or other precious metals? “Gold is bitcoin’s most ambitious asset” Watkins explained. “Like BTC, gold is a rare commodity, the value of which comes almost entirely from its monetary premium.”
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What you should know
Nairametrics revealed how the yellow precious metal underperformed BTC by nearly 11%, despite rising to around 16% in the first half of 2020 and hitting eight-year highs last month. Platinum and silver both ended the first half of 2020 with negative gains.
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Bottom line
It is fair to understand the bias of global investors on the choice of the flagship cryptocurrency, bearing in mind that gold has increased by 26.37%, while Bitcoin has increased by 120% over the year.
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