Gold and Bitcoin could rise similarly in value in the future
Bitcoin has often been compared to gold for its value retention properties. Like gold, BTC is not bound to a central control authority and serves as a hedge against government manipulation of paper currencies. In contrast to gold, however, Bitcoin is still very volatile. However, this could change in the future.
Constant appreciation for Bitcoin and gold
BTC, or digital gold, as Bitcoin is often called, has been anything but stable in recent years. In 2018 it dumped over 80%, in 2019 it has increased over 160%. The extrapolation of the all-time chart for Bitcoin’s decade-long history shows a parabolic price curve taking into account these large market cycles. Read more about investing in crypto at findnerd.com.
The golden commodity price chart shows a similar but much flatter curve as its price has risen steadily since the 1970s. Crypto trader “dave the wave” has overlaid the two parabolas, revealing an interesting pattern both when the scenarios take effect and when the curves continue on their current paths.
Both Gold and Bitcoin are expected to increase their value significantly – with profits accelerating and declining over time. After meeting about 18 months ago, the two parabola lines seem to be growing at similar rates.
From 2025 to around 2040, the two assets could grow very similarly – with the option of Bitcoin prices being set at gold. Provided there has been sufficient BTC acceptance and use to reduce volatility as investments in gold continue to grow over time. The following illustration is based on gold prices multiplied by 400. There are some discussions going on if bitcoin will remain legal in certain countries, read more at http://www.doublegeek.fr/le-bitcoin-est-il-legal-en-france/ about the current situation in France.
This represents a gold bar that puts gold on a par with BTC in terms of scarcity. And also in terms of total market capitalisation, this ratio would remain more or less the same. I doubt that BTC will reach the market capitalisation of gold. Somewhat more pertinently, he added: I think the main reason for the price is the *capitalisation* of something that is perceived as scarce.
Currently, Bitcoin outperforms almost all traditional investments – including gold. This year alone, gold has risen 18 percent from $41,100/kg to $48,546/kg at today’s prices, goldprice.org says. Bitcoin, on the other hand, increased by 166 percent over the same period from $3,750 to $10,000.
- Both are piled on the perception of scarcity, and both are held for similar reasons.
- There is no reason why this should change in the future if economic tensions escalate as the world’s superpowers devalue their currencies to wipe each other out.