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Threatens to the summit: Will Bitcoin replace gold?

Throughout history gold has been considered the "safe currency", but the bitcoin market is growing and today more and more people are beginning to recognize its importance.

Sagi Bakshi, CEO of Coinmama shares the accelerated upheaval of the digital currency during the Corona period and presents forecasts that will affect the global economy

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• Bitcoin

• gold

Sagi Bakshi

Tuesday, 10 November 2020, 11:22

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A small clay jug with a thousand-year-old gold coins was uncovered in Jerusalem (Photo: Israel Antiquities Authority)

In a crisis, the immediate response in the financial world is to rely on safe and stable assets.

Gold is the most prominent of them and is generally considered a safe asset against global shocks and inflationary eruption.

However, at the outbreak of the Corona crisis it has become apparent that the world is moving to adopt new paradigms in many areas of life.

One of the first phenomena as a result of this sudden shock, was a decisive and vigorous transition to the use of online tools in education, consumption, communication and more.

But the area that was most prepared for this accelerated upheaval is the area of ​​digital currencies.

Bitcoin enables a decentralized international economy, open to all, independent of this or that government, without banks and without a deliberate central hand other than an algorithm known in advance and transparent to all.

These characteristics, coupled with a global health crisis have led to a sharp jump in the price of cryptocurrencies and the Bitcoin exchange rate soared from a low of $ 3800 in March 2020 to a price of over $ 14,000.

This may well be significant evidence of the beginning of a change in humanity's approach to bitcoin as the new gold, and suddenly the "safe asset" in the form of gold which is usually used as an investment protection against extreme scenarios may become a kind of gamble that puts traditional investments exposed and vulnerable.

One bitcoin will always be worth one bitcoin and above it a block of 21 million coins - although existing since 2009 is still considered a new idea and one of the most important inventions of the 21st century.

The digital currency will be woven into the fabric of the global economy and strengthen its position through many financial transactions - especially in light of the US Treasury Department (OCC)'s announcement that any U.S. state bank can hold Bitcoin. A move that for many banks will adapt to a new financial environment. Another new market in accordance with the regulations of each country vis-à-vis the banks.

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Sagi Bakshi

There is no currency in the world that is considered immune to failures but Bitcoin has proven its credibility over the years since its inception, and the future holds another huge potential.

To date, about 88% of the 21 million coins have been mined, this upper barrier makes the coin rare and in this game the "early adoption" of technology is of great significance.

The value of the aggregate gold market currently stands at about $ 10 trillion.

The value of the Bitcoin market is about $ 280 billion.

If indeed the millennials adopt this "Gold 2.0" narrative - Bitcoin has the potential to reach the market value of gold in the future and even more - 35 times its price today.

In the long-term channels of interest in Bitcoin will increase and if in the past the prevailing assumption was to go for "safe" in the form of gold as an asset that retains its value against inflationary currencies, the future marks a new safe haven: Bitcoin.

Digital assets will continue to evolve because this is the nature of technology.

What about gold?

There is no expectation or future prediction for his disappearance.

He is here to stay but nevertheless the time has come for the ancient king to vacate his place out of respect for the regent who will provide a decentralized and open financial future for everyone - Bitcoin.

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