Is Bitcoin a better long-term investment than gold?
In the first quarter of 2023, Bitcoin recorded an unprecedented performance with a growth of 73%.
To explain the reason for the growth of Bitcoin, it is important to refer to its genesis and the historical period we live in. The subprime mortgage crisis wreaked havoc on the US economy in early 2009, with many banks doomed to fail.
Bitcoin was specially designed to counteract the influence of traditional currencies, which are controlled by central banks. With this virtual currency, we can finally break the hegemony of these currencies.
In 2023 we face a situation very similar to the crisis of 2007-2008, with banks in trouble and central banks rushing to print money to save them.
We have already addressed this topic in previous articles: printing money is a recipe for disaster, as it increases both private and public debt. It has become increasingly clear that government bonds and deposits, especially in local banks, are not safe enough. The recent case of Credit Suisse, where the bonds were completely cancelled, is a very worrying example.
The current tensions are leading to an increase in demand for Bitcoin, which is currently behaving like the essential safe haven asset: gold.
In my previous piece, I expressed my view on the impending market crash and stressed the importance of having safe assets in your portfolio if and when it happens.
Over the past 3 months of 2023, Bitcoin has proven to be a resilient currency, gaining ground in weeks of both ups and downs. As regulation evolves, the outlook for Bitcoin is getting better and better.
China had banned the purchase of cryptocurrencies, but soon realized the gravity of the mistake. The Chinese have found a way to buy and sell cryptocurrency on foreign brokers despite the national ban.
From the latest updates on TikTok, we can see that Bitcoin has started to become a bit more accepted. For the first time, the Bitcoin price update appeared on the platform, which symbolically represents a higher regard for it.
Investor sentiment today is highlighted by a record number of tweets referring to Bitcoin – a clear sign that investor interest is growing rapidly. The social network gives everyone a deeper understanding of which assets will become more popular in the near future.
There are also positive signals from a political point of view from America, where Robert F. Kennedy Jr. publicly expressing his opinion on his Twitter account, arguing that cryptocurrencies like Bitcoin offer a way out of the effects of the Fed’s monetary policy.
Since the first financial crisis, central banks have seemed eager to print more money, which can lead to significant currency devaluation. This is something of great concern for the markets.
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As monetary values begin to fall, gold is overtaken by Bitcoin. This is due to the limited supply that gives this cryptocurrency an advantage over other investments.
Bitcoin has a maximum amount of 21 million BTC that can be “mined”. Case studies have shown us that investing in Bitcoin can provide great returns after a massive cash injection, such as in 2020 during the pandemic. In that exact period, Bitcoin clearly surpassed gold as a safe-haven currency.
The social network gives everyone a deeper understanding of which assets will become more popular in the near future. There are also positive signals from a political point of view from America, where Robert F. Kennedy Jr. publicly expressing his opinion on his Twitter account, arguing that cryptocurrencies like Bitcoin offer a way out of the effects of the Fed’s monetary policy.
Since the first financial crisis, central banks have seemed eager to print more money, which can lead to significant currency devaluation. This is something of great concern for the markets.
This year, amid concerns of a banking crisis, Bitcoin has risen over 80%, while bullion is up just +11%.
The technical situation is also very good, with prices well above the 3-month average. The volumes are also supported by a fast exponential moving average that signals a decidedly strong trend.
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Dissemination: I opened positions related to Bitcoin in March and I am ready to buy more Bitcoin and related stocks such as RIOT PLATFORMS, INC. (RIOT). The content and information presented on this page should not be considered a solicitation to invest in the financial markets. It is simply a matter of personal opinion and operations.
Written by:
Antonio Ferlito
