For decades, gold has remained the undisputed store of value. However, a section of the financial world believes that gold might lose the position to cryptocurrencies, Bitcoin in particular.
By press time, gold value stood at $7.8 trillion while Bitcoin had a market capitalization of $102,369,942,799. The debate of Bitcoin replacing was recently ignited by a television ad dubbed “Drop Gold promotion”.
The commercial that garnered 100,000 in less than 24 hours, forced the Gold Council to clarify on the precious metal’s position as a store of value. Through Twitter, the council stated that cryptocurrencies are no replacement for gold.
The council’s Manager of Investment Research, Adam Perlaky published an article explaining why gold will dominate Bitcoin for many years to come. Perlaky stated gold has maintained its position since the ancient times while Bitcoin is only ten years old.
He pointed out that “gold is less volatile, has a more liquid market, trades in an established regulatory framework, has a well-understood role in an investment portfolio, has little overlap with cryptocurrencies on many sources of demand and supply and it is a safe-haven investment.”
The official added that the cryptocurrency sector is not regulated, resulting in fraud. In comparison to gold, he stated that the former attracts transparent transactions. Perlaky noted that if authorities decide to regulate cryptocurrencies, investors might be turned off.
Surprisingly, the council maintained that it backs innovative initiatives within the blockchain and cryptocurrency sector making the technology ideal for tomorrow. In other words, the council views Bitcoin as competition. However, the council reiterated that gold is a key aspect of all types of investments.