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- Cryptocurrency volatility is pushing the investors towards traditional Gold
- Although Gold don’t provide higher profits than Bitcoin and other altcoins, it remained stable
- Revival of economy and crypto market crash seems have helped Gold price to gain a bullish trend
- The cryptocurrency market is speculative due to its small scalability in the financial world
The cryptocurrency market has gained mainstream attention by giving heavy gains to its investors. Amid the global pandemic, investors began to find digital assets as a store of value and inflationary hedge. Following the scenario, several institutional inventors also began to accumulate virtual assets in their investment portfolios. Notably, many started to consider cryptocurrencies as a safe haven. However, in the current scenario, it seems the money from the crypto market seems to be moving into Gold.
Cryptocurrency investors seem to turn to Gold
Bitcoin has been performing at a good pace due to several reasons, among which inflation remained the primary one. Experts in the cryptosphere believe that Bitcoin is almost a law itself, even in the altcoins market.
However, after an amazing bullish rally, the digital assets market crashed last month. At the time, Bitcoin had lost more than 50% of its value, and it is estimated that the coin will continue to lose more to 75%-80%.
As the crypto market began to fall, investors began to find another safe haven to store their funds. Following the data from GoldPrice, we have observed a recent upswing in the conventional Gold price. Notably, it seems that the money from the market is moving towards traditional Gold.
Demand of investors seems taking a u-turn
Gold is the traditional asset that faced a drop in demand during the COVID-19 pandemic. The shutdown of the jewelry trade caused the fall in the price of Gold. However, now it seems that things in the financial market are changing. The global economy is reopening, and soon the jewelry trade will be revived, which will bring a major recovery in the price of Gold.
Such higher peaks and lower troughs are not found in conventional markets. On the other hand, the volatility in the crypto market is also causing a wipe-out in the number of investors. Cryptocurrency market analysts believe that the volatility is in a league of its own.
Crypto market is just a penny on the dollar
Although Bitcoin and the entire cryptocurrency market performed well, achieving more than $1 trillion of market cap, it remained a penny on the dollar. The digital currency market is valued at near a trillion, and the Gold market is valued at $7.9 trillion. Moreover, the United States stock market is valued at $28 trillion. It is also worth noting that a lesser force could have a greater impact on the digital currency market.
What makes crypto prices speculative?
Several factors make the price of cryptocurrency volatile. Digital assets have more liquidity than traditional financial markets, which magnifies the impact. Notably, most of the time, the prices in the crypto market perform on speculation. Many financial experts believe that these facts are caused due to the lack of a healthy ecosystem of institutional investors and trading firms.
The comparative factors show clearly why Gold is a safe haven. Many have trust in Gold as a protective asset that shines in the long run. Even if Gold doesn’t always, the asset remains stable. However, the nascent stage of cryptocurrencies is yet to show its full potential and soon will prove its worth.
