During times of economic uncertainty, precious metals like gold tend to surge in value as investors search for ways to protect themselves. Gold is viewed as a safe haven from volatility and is used to store value when you’re not sure of which way the market can go.
A lot of assets have been surging in 2020, and gold is right there along for the climb. The sentiment around gold has been positive this year and now the precious metal asset has hit its highest levels since 2011. Gold is now up around 19% this year and experts are predicting it could go over the $1900 mark and make all-time highs.
Bitcoin has been hovering around the $9100 level for the last few weeks but has just made a sharp uptick to $9,500 and still outperforming gold, silver, and platinum in 2020.
Forbes recently reported that big banking institutions like Morgan Stanley, JPMorgan, and Goldman Sachs are all expecting gold to be on the rise this year. If so many are predicting that gold will surge as a hedge it would make sense for Bitcoin to take off as well.
According to the June 2020 edition of the “Bloomberg Crypto Outlook,” Bitcoin should be in store for some big gains as well.
“The same forces buoying gold support Bitcoin, yet the supply of the crypto is more constrained. Adoption, by default, is the primary Bitcoin metric, and our indicators remain positive.”
Over the years, bitcoin has been compared to gold or referred to as “digital gold” by many folks inside and outside of the blockchain industry. Now as we continue to see a wider agreement that Bitcoin could be a useful store of value, the value of BTC could climb simultaneously with gold.
Bloomberg researchers think Bitcoin and Gold could run together in lockstep in the coming months.
“Increasing companionship with gold is a Bitcoin-price tailwind, in our view. At the highest-for-longest 52-week correlation and beta ever vs. the metal, the first-born crypto should continue to advance for reasons similar to gold, fueled by unprecedented global central-bank easing.”
Some gold advocates may display a dislike of Bitcoin and other cryptocurrencies, but they have something important in common. Both gold bugs and Bitcoin lovers are always warning against the effects of money supplies being constantly increased.
So during a time where we keep seeing the Federal Reserve pumping new dollars into the market, it makes sense that bitcoin and gold would be in inclination with a lot of investors.