Germany’s biggest bank says more people now prefer Bitcoin over gold
- 21st November 2020
- Posted by: Hakeem
- Category: Crypto
Germany’s biggest bank, Deutsche Bank, recently disclosed that more people now prefer Bitcoin over gold in hedging their money.
In a note credited to Zerohedge, the financial juggernaut of Europe’s biggest economy, revealed investors are steadily seeing Bitcoin as a legitimate store of wealth option.
What they are saying
Deutsche Bank research strategist, Jim Reid, gave key insights into what is changing investors to see Bitcoin more as a tool to hedge their cash better than traditional safe-haven assets like gold.
“Bitcoin is up another +3% overnight and seems to be creating a momentum of its own. It’s up over 70% in the last six weeks, as more and more investors are starting to see it emerge as a credible asset to invest in. There also seems to be an increasing demand to use Bitcoin where Gold used to be used to hedge Dollar risk, inflation, and other things,” Reid said.
Bitcoin’s strong performance is no shock to some analysts, especially in the context of the benchmark cryptocurrency showing a high correlation with global equity markets.
“Given that equities are now near, or in some cases above, their highs reached in February, it’s not surprising to see BTC do the same,” said Ryan Watkins, BTC analyst at Messari.
Why compare returns from BTCs to gold or other precious metals? “Gold is bitcoin’s most aspirational asset,” explained Watkins. “Like BTC, gold is a scarce commodity, whose value is derived almost entirely from its monetary premium.”
What you should know
Bigwig FX revealed how the yellow precious metal underperformed BTC by nearly 11% points, despite surging to about 16% in the first half of 2020 and touching eight-year highs last month. Platinum and silver both ended the first half of 2020 with negative gains.
It is fair to understand the bias of global investors on choosing the flagship crypto, taking into account that gold is up 26.37%, while Bitcoin is up 120% on the year.