Bitcoin is becoming as safe a haven as gold, one investment analyst told CNBC.
The price of the cryptocurrency has been rapidly rising in recent weeks. It traded above $730 per bitcoin at the end of last week, levels not since February 2014.
According to Chris Burniske, a blockchain analyst and products lead at investment manager ARK Invest, the cryptocurrency could be referred to as digital gold, as it shares many of the characteristics that makes the precious metal a great store of value.
"Bitcoin shares those same characteristics," Burniske told CNBC in a phone interview. "[Both have an] extremely limited supply and a relatively inert state. Bitcoin and gold can both be used: for example, gold is used in electronic circuits and bitcoin is used as payment.
While gold has performed well in recent months, rising 20 percent year to date, Burniske suggested investors should also consider diversifying into bitcoin.
"When you look at the global markets, there’s lots of fear, uncertainty and doubts. You’ve got people worrying about the equity markets [and] you’ve got people fleeing into bonds," he said. "While gold has had a bit of a run in 2016, over the last five year period it’s been a terrible performing asset."
"So you’ve got people starting to wonder where there are safe havens to store their assets. I think you have lot of people saying ‘Hey we want to diversify a little bit’ making allocations to bitcoin’."
Some disagree that bitcoin should be considered a safe-haven asset. Vijay Michalik, research analyst at consultancy Frost & Sullivan, pointed out that bitcoin is still very volatile."Bitcoin is still such a new innovation that the economics of its value aren’t fully understood, and the price looks likely to remain moderately volatile in the medium term," he told CNBC in an email."Volatility and the long-term unknowns […]
