Despite its volatility and regulatory issues, Bitcoin is becoming more often regarded as a viable gold substitute due to its robust backing and impressive returns.
The development of cryptocurrency has generated intense discussion for years. Despite early predictions that this digital asset bubble would burst, new information indicates that cryptocurrencies are becoming a significant player in the financial system.
In an interview with The Ultimate News told by Rahul Kanwal, author, and investor Ruchir Sharma offered insights that help explain why cryptocurrencies like Bitcoin are increasingly considered long-term investments alongside more conventional safe havens like gold. The development of cryptocurrencies has generated intense discussion for years. Despite early predictions that this digital asset bubble would burst, new information indicates that cryptocurrencies are becoming a significant player in the financial system.
Views on digital assets have changed as a result of President-elect Donald Trump’s pro-crypto stance. His recent remarks acknowledge the contribution of cryptocurrencies to the financial environment, encouraging variety and innovation while boosting investor confidence.
Bitcoin’s value has soared since Trump won the election, highlighting its rising prominence. Similar to gold, Bitcoin showed incredible endurance following market dips, solidifying its position as an alternative asset that appeals to a diverse spectrum of investors.
“Bitcoin has produced astounding 10-year returns of over 10,000%, far outpacing gold’s 117% in the same period,” stated Nikhil Sethi, Founder & MD, of Zuvomo. With returns of 2,500% over the previous five years, Bitcoin has continued to beat gold’s 102% return.
“Cryptos are quite hazardous because they are very volatile and can lose a lot of value in a day. Although Bitcoin is undoubtedly the most popular investment for exponential growth, gold has applications beyond investing; it is still essential for jewellry, technology, and central bank reserves, confirming its status as a reliable store of value, he continued.
GOLD VS CRYPTO: RIVALS OR COMPANIONS?
Gold has long been regarded as a safe investment, an inflation hedge, and a buffer during uncertain economic times. Bitcoin is rapidly being likened to gold, despite its initial perception as a speculative asset characterised by volatility and extreme price swings.
Gold and Bitcoin are becoming popular options for people looking for alternatives to conventional assets like the US currency, Sharma noted. He underlined that other major currencies, like the euro or the Chinese yuan, which are beset by their own economic problems, have proven unstable for international investors. As a result, assets like gold and cryptocurrency have gained more attention.
Trump’s support for cryptocurrency represents a change in the political and economic stance of the general public towards digital assets, indicating a greater understanding of their significance. This increased understanding supports Sharma’s assertion that, in spite of the speculative price swings it has seen, “crypto is here to stay.”
“The idea that cryptocurrency will become the new gold is becoming more and more realistic,” stated Gracy Chen, CEO of Bitget. At the Nashville Bitcoin Conference, President-elect Trump hinted that if elected, he would think about making Bitcoin a national reserve asset; this could cause a change in public opinion. The validity and standing of cryptocurrency would be greatly improved by such a move.
This change has the potential to change how people think about investing and protecting wealth, making cryptocurrencies an alluring substitute for conventional assets. “Digital finance may be the way of the future,” Chen remarked.
Additionally, the fact that there are only 21 million Bitcoins makes it even more of a “digital gold.” He pointed out that its scarcity stands out as an alluring trait in light of rising prices and currency fluctuations.
LOOKING FORWARD: THE FUTURE OF CRYPTO AS A “DIGITAL GOLD”
Whether cryptocurrency can become the new gold may not be a simple question. The cryptocurrency market is still erratic and vulnerable to movements in market sentiment, governmental developments, and technological breakthroughs. Investors should continue to be alert and knowledgeable since, despite the fact that cryptocurrency presents enormous risks, it also presents profitable chances.