We often compare Bitcoin and Gold but obviously with an adequate reason. Both of them has proved to be either a backup asset keeping the user on a safe side or a disastrous hedge extremely vulnerable and responsive to market conditions and economic crisis. And they actually gain value when global market responses to macroeconomics and geopolitical turmoil.
Many people are wondering how will the both of them react perpetually and should the hike in their price shall be announced by the Federal Reserve (FeD) this afternoon? Many people are expecting this to happen.
Note: Investing in cryptocurrencies is highly vulnerable and extremely unpredictable so a person must invest that much amount only which he can afford to lose. According to the suggestions of many market experts, any increase in the benchmark of FeD will have an impact on Bitcoin. Although, the benchmarks of FeD will also have an influence on gold as well.
Bitcoin Marches on
Bitcoin is currently the no. 1 cryptocurrency prevailing in the market with its huge market value and demand. But its all set to break its own records and blast off influenced by the factors which are unique to the particular asset. The CEO of Seychelles- based cryptocurrency exchange BitMeX, Arthur Hayes recently said that Bitcoin will have some effect on its price due to these peculiar and individual factors.
A similar view was expressed by a senior market analyst of the social media platform eToro, Mati Greenspan. Bitcoin is nowhere near connected right now with any of the traditional markets and bears absolutely no interest rate outlook at this time. CEO of RagingBull.com, Jeff Bishop also stated in his recent interview that in the current market people are buying Bitcoin for all purposes.
He also added in his statement that when a user has an asset which is growing in a basis of 10%+ every week regularly so the users won’t really consider the FeD causing 10-year interest rates to over 3% as the major concern.
Tailwinds for Gold
Several analysts feel and also stated that the rise in benchmarks won’t have a huge impact on Bitcoin but it will have a great impact on gold. And the price of gold might change according to that. CEO of GraniteShares, Will Rhind commented that how such an amelioration would be a boon to a precious metal like Gold and also added in his statement that how the interest rate hike this week would be for the betterment of Gold.
Also CEO of Paygine, an open blockchain financial platform for fintech and Crypto business, Kirill Radchenko also expressed similar views and stated that he completely agrees with the fact that this would do good to Gold with such development. The director of Stock Trading at GSI Exchange, Ron Smith stated that with the increasing rates of interest the prices of Gold have always increased.
Though some of the market experts and analysts feel that the relationship between FeD and the price of the precious metal, gold is more complicated and confusing.
The CEO of blockchain startup, ExsulCoin, James Song said,
“Gold has historically been used as a hedge against inflation, against purchasing power risk, however, gold prices usually drop against a strengthening dollar, and that’s what will likely happen if the Fed raises the target rate 0.25%, as it is expected to”.
Bullish Outlook
The CEO of Latium, David Johnson expressed a different view and stated that the price of Gold is likely to be driven forward with his own explanation.
“Gold should continue to move up due to risk aversion from capital markets and diminishing global stimulus.”
He also added in his statement that Bitcoin is moving up regularly due to the increased interest of investors on it as it is proving to set New boundaries for cryptocurrencies and improving to be a more defined class of assets with time.
