In addition to its stable price in recent weeks, talks of Bitcoin’s edge in gaining relevance to physical gold particularly as a traditional store of value seems to be gaining more ground following the slowing price of the precious metal.
Economist and investor, Tuur Demeester, looked at it from a point of view in a recent post and established that Bitcoin can be both a secure store of value (digital gold) and a liquid medium of exchange (digital cash) used for small size payments.
He based his conclusion on the view that cash and gold aren’t that different and cash money has to have the possibility to be stored privately and securely for its value to remain immediately available.
Bitcoin can reach $2000 – $3000 this year
Getting this narrative clearly established will help carve out a new mindset that would trounce the held belief about physical gold as being the only hedge. It will also make emerging new data that suggest that Bitcoin and gold are negatively correlated to sink into users following both markets to draw conclusions for their investments.
The reference above supports the belief held by Vinny Lingham, the co-founder and CEO of Civic.com who has been actively involved in analyzing the market trend, particularly for crypto economics, that gold will dip or end 2017 below $1,000 and likely to fall even further to around $700-$800 range before the end of 2018.
Lingham had earlier forecasted that Bitcoin will reach between $2000 and $3000 this year. At around $1,200 presently, having dipped briefly to the $1,100 range, Lingham’s projection is that Bitcoin will break the price barrier- as well as its use and psychological view – over an ounce of gold already this year.
Bitcoin will be worth more than gold
In line with Lingham, Michael Dunworth, CEO and co-founder of Wyre, explains to Bloomberg in a video interview, why he thinks Bitcoin will be worth more than gold in the future:
“Well, if you look at the principles of Bitcoin, it actually already met parity with gold back in the end of 2013 – maybe at the start of 2014 – for one Bitcoin and an ounce of gold. But moving forward, Bitcoin has what gold wishes it had: it has divisibility, still has scarcity like gold. It’s also easily transferable. If I wanted to get a brick of gold to you over there, it’s going to be pretty tough. But if I want to send you some Bitcoin at the same level of the store of value, I can do that pretty quickly. So I think it’s a new age for storing value.”
Dunworth hinged his prediction that Bitcoin will be worth more than gold on the increasing demand for the digital currency.
“Obviously, the regulation in China is forcing a lot of people to try to avoid the yuan which is really having a tough time against the dollar,” he says. “We can take a look as well at India which has just cut 86 percent of notes in circulation when you look at the 1000 INR note.”
“And you are paying a premium to buy Bitcoins in India of up to 12 percent,” Dunworth notes. “We saw that same level of arbitrage in China market as well compared to the US dollar.”