The world's largest cryptocurrency has often been compared to gold, calling it digital gold or gold 2.0. Bitcoin was then considered a safe haven or a way to store the value of fiat money in uncertain times.
With the passage of time, it appears that the correlation between the two markets no longer exists, and in fact becomes negative. Consequently, bitcoin priced in gold rather than the dollar also seems to be climbing higher and higher. Yesterday, the price of the world's most popular cryptocurrency surpassed $50,000, only to better that record today and find itself at $51,500.
Interestingly, another listed company has become interested in bitcoin, this time from the German stock exchange, becoming the first German company to buy BTC. From the company's announcement we can read that SynBiotic SE wants to hedge against the devaluation of the euro with bitcoin. Thus, the company began to transfer part of its free liquidity to bitcoin.
The CEO of the company, explained the decision by saying that the decision was not related to price fluctuations, but to the risk of devaluation of the euro and the dollar. For this reason, the company has more long-term confidence in bitcoin than in the euro or dollar, where a central institution, influenced by politicians, can increase the money supply immeasurably.
Adoption of BTC is increasing globally, which, with the supply of bitcoin decreasing and the outflow of coins from exchanges, makes the availability of bitcoin less and less, hence buyers have to pay a higher and higher price to encourage sellers.
Meanwhile, gold has come under pressure, falling for the fifth session and touching $1,784 per ounce, the lowest level since December 1 last year. Falling gold prices may be supported by rising US bond yields and the strengthening US dollar on Wednesday. Prices were further pressured by expectations of a strong economic recovery driven by the introduction of vaccines and increased government spending. However, inflationary risks associated with record high debt levels could push prices higher in the long run. Only that it would have to be coupled with a deceleration in the rise in debt interest rates.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
76.44% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
