Bitcoin in terms of capitalization may soon be equal to gold: an expert explained why these assets are becoming more and more popular
Kyiv • UNN
Gold and bitcoin are viewed by investors as safe-haven assets in turbulent times, with gold being a stable asset and bitcoin considered a digital equivalent, although they have different underlying factors that determine their prices.
Gold, and sometimes bitcoin, is seen by investors as a "safe haven" in turbulent times. This and the similarities between these two types of assets were discussed in a commentary to UNN by Serhiy Khodakevych, Professor of the Department of Banking and Insurance at the V. Hetman Kyiv National Economic University.
According to the expert, the value of gold has recently shown an upward trend, although prices fluctuate under the influence of various factors.
"Such fluctuations can be attributed to various factors, for example: geopolitical factors, including the military conflict between Russia and Ukraine and between Israel and Hamas, have prompted individual investors to seek safety in gold, and they have been joined by central banks, which have bought 800 tons of gold as of the end of September 2023; changes in the Federal Reserve's monetary policy on rates can affect gold prices. Now, rates are expected to be cut, which will contribute to the growth of gold prices due to increased liquidity and reduced investment risks," explains Khodakevych.
Gold is a stable asset, the expert explains. And such assets are especially in demand in unstable times.
"Gold is indeed considered a stable asset and represents a safe haven for investors on a variety of scales, from micro to global. When expectations for the global economy are negative, investors look for safe assets - such as gold - to preserve the value of their investments.
The impact of investor sentiment on the global economy is that it is a reflection of fundamental factors. For example, if the threat of war or an aggravation of the situation in the world increases, it can cause investors' sentiment to deteriorate and encourage them to seek safe assets.
Such an asset, as mentioned above, is gold, which is considered a safe haven in times of instability. Bitcoin can also be included in this list, as it is often seen as the digital equivalent of gold," says Khodakevich.
The underlying factors behind price changes are partly different for both gold and bitcoin, but both assets are attractive to investors.
As for the similarities between gold and cryptocurrencies such as Bitcoin, they share some common characteristics, such as:
- limited number
- speculative nature
"At the same time, gold is a different asset, unlike bitcoin. Gold is not a technology, its value does not depend on electricity and Internet connection. Physical gold is scarce, durable, used in industry and as a jewelry material, and therefore valuable. Bitcoin is mainly used as an investment tool, Bitcoin is a record, it is a technology," the expert said.
Bitcoin has advantages over fiat currencies.
"It is in demand as an investment asset because it is limited and attractive for long-term investments. Investors buy it because they understand the project and believe in its success. In general, from 2009 to the present, there has been an upward trend in the price of bitcoin.
Although bitcoin is a speculative asset, it is part of the global financial system. It is used by investors and market players as a valuable asset, and its popularity is growing. This suggests that demand for bitcoin will continue in the near future, and its price will continue to rise. At the same time, it is worth noting that bitcoin is not a proven asset like gold. It is best to consider bitcoin as a promising technology. If it manages to achieve widespread adoption and use, it will help solve a number of serious problems in the global financial and monetary system," Khodakevych believes.
When the global situation stabilizes, investors will pay attention to more profitable assets, such as stocks, bonds, real estate, etc.
Recall
Olena Sosedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, also believes that instability in global politics and the economy is contributing to the growing interest in cryptocurrencies as alternative assets.
"Bitcoin is often compared to gold because of its properties as a digital store of value. Like gold, bitcoin has a limited supply and is sometimes used as a hedge against inflation. However, bitcoin also has distinctive features, such as high portability, divisibility, and transparency," the expert explained.
Bitcoin in terms of capitalization may soon be equal to gold: an expert explained why these assets are becoming more and more popularExclusive
A former Ukrainian sumo champion who defected to the enemy and is now raising money for the occupation forces in Crimea will be tried
russian volunteer units announce attacks on military targets in belgorod and kursk
Newly elected Head of the NACP met with G7 ambassadors and told about plans for the development of the National Agency
Ukraine got rid of dependence on Russia in the nuclear industry - Energoatom
A missile threat has been announced in the Kursk region of the Russian Federation
Average transfer of 147 UAH: one third of Ukrainians regularly donate to the Armed Forces - Deloitte
British intelligence: russians have started early "elections" in the occupied territories of Ukraine
Kherson regional council deputy detained for preparing seized hospitals for Russian military
Russian border breakthrough: at least four Russian soldiers killed
Popular
Russians in the TOT introduced a new subject in school - "moral foundations of family life"
The napkin on which Messi's first "contract" with FC Barcelona was signed was auctioned off for a huge sum
"The world can stop Russian terror": Zelensky reacts to Russian missile strike on recreation center in Kharkiv region
Zelensky and First Lady honor victims of repression in Bykivnia
Rescuers in Zaporizhzhia rescue a kitten trapped in a concrete pit
Publications
Attempt on the Prime Minister of Slovakia: xenophobia and the Russian trace
The law on strengthening mobilization: what will change after May 18 for those liable for military service
The Housing Capital case: where did the billions go?
Only debtors see the Russian footprint: how the label of cooperation with russia is used in business wars
Criminal case opened against acting deputy head of the State Tax Service Sokur for obstructing the supply of fuel to the army
Bitcoin in terms of capitalization may soon be equal to gold: an expert explained why these assets are becoming more and more popular
Gold and bitcoin are viewed by investors as safe-haven assets in turbulent times, with gold being a stable asset and bitcoin considered a digital equivalent, although they have different underlying factors that determine their prices.
A former Ukrainian sumo champion who defected to the enemy and is now raising money for the occupation forces in Crimea will be tried
Former Ukrainian world sumo champion Olha Davydko, who is currently hiding in occupied Crimea, is accused of aiding the russian aggressor state by financing its occupation groups and promoting propaganda narratives, for which she faces up to 12 years in prison.
russian volunteer units announce attacks on military targets in belgorod and kursk
The Freedom of Russia Legion, the Russian Volunteer Corps, and the Siberian Battalion announced strikes on military positions in the cities of Belgorod and Kursk, calling on civilians to evacuate immediately.
Newly elected Head of the NACP met with G7 ambassadors and told about plans for the development of the National Agency
Viktor Pavlushchyk, the newly elected head of the National Agency for the Prevention of Corruption, held his first meeting with G7 ambassadors and the Head of the EU Delegation to Ukraine, where he presented his vision for the NAPC's further development, including team cohesion, improving the declaration process and preventing corruption risks.
Ukraine got rid of dependence on Russia in the nuclear industry - Energoatom
Ukraine got rid of its dependence on Russian technology and nuclear fuel, replacing it with fuel from the American company Westinghouse.
A missile threat has been announced in the Kursk region of the Russian Federation
A missile threat was announced in the Kursk region of Russia, and sirens sounded.
Average transfer of 147 UAH: one third of Ukrainians regularly donate to the Armed Forces - Deloitte
92% of Ukrainians make donations to help the Armed Forces or those affected by the war, with the average donation amounting to 147 hryvnias, and 33% of Ukrainians donate regularly.
British intelligence: russians have started early "elections" in the occupied territories of Ukraine
In the occupied territories of Ukraine, russians began to vote early in the presidential elections, with local authorities forcing the population to participate in the vote. The occupation authorities probably want to create the impression of a democratic choice despite the war.
Kherson regional council deputy detained for preparing seized hospitals for Russian military
A deputy of the Kherson Regional Council was detained for cooperating with Russia during the occupation - preparing seized hospitals for military hospitals for wounded Russian soldiers and supplying medicines to the occupiers.
Russian border breakthrough: at least four Russian soldiers killed
At least 4 Russian soldiers were killed and about nine wounded in drone attacks and clashes near villages in the Belgorod and Kursk regions of Russia on March 12.