The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices, going back to 2010, according to The Wall Street Journal. Some see this as a sign of investor perception of bitcoin as a safe store of value.
Not one for lack of volatility, bitcoin has witnessed wild price changes from the beginning. Bitcoin watcher Gil Luria , managing director at Wedbush Securities , who covers payments and e-commerce, stated that the cryptocurrency has taken on a role similar to gold as its usage has grown. Holding bitcoin, like gold, can appeal to investors who see both as an alternative when they lose faith in traditional asset classes.
Luria said it has a lot to do with the perception of value. Gold, he noted, has long been the only refuge for people concerned about the monetary system and the global economy. What The Trend Means
Bitcoin’s volatility fell below gold’s for a short period in 2012. The more recent trend has more significance as the cryptocurrency’s activity has grown, Luria said. Monthly bitcoin transactions grew from 200,000 in January 2012 to more than 6 million this March, according to Wedbush Securities data. Luria said there are a lot more forces in balance at present.
(Wedbush Securities has acquired holdings in a bitcoin trading platform, Buttercoin, CCN has reported.) Bitcoin Versus Gold
Some observers claim the trend may not last. The value of the bitcoin industry is estimated at $6.6 billion, according to Blockchain. This pales in comparison to the amount held in gold . The over-the-counter gold market trades between $180 and $250 billion daily, according to the World Gold Council.
The low volatility of the cryptocurrency could be due to a move to the sidelines as investors wait for more information about the […]
