By
Chimamanda U. Martha
May 14th, 2024
Bitcoin (BTC) price seems to have stuck below $7,000 while gold is having a field day thanks to a seven-year all-time high. Will gold outperform Bitcoin at this time?
Bitcoin (BTC) price is below $7,000. This also comes at a time when gold seems to be having a breakout moment. Bitcoin (BTC) prices almost reached the $7,000 breaking point but stopped at $6,930.
Bitcoin (BTC) Price Has Stuck at One Level
The price jump over $7,000 in Bitcoin (BTC) last week seems to be a result of positive China data despite the COVID-19 situation. There is also lackluster movement despite positive gains made by the futures. Bitcoin futures, by the way, are sticking to their guns about the profits made.
Gold is having a great time at $1,717 per ounce. The Asian trading session reached a high of $1,730 per ounce. On a month-to-date basis, gold is north of 9% in terms of prices. Bitcoin is behind by about 4% with just a 5% increase.
Gold is having a field day as the U.S. Federal Reserve has pumped about $6 trillion into the financial markets. This is the first time that this is occurring. The COVID-19 pandemic is in itself a novel situation that Countries are doing their best to adapt to.
The world economy has been reeling. The stay-at-home restrictions have shut down non-essential businesses. This has led to national economies bleeding with no end in sight. Stimulus seems to be the only way to as businesses are failing and the numbers of the unemployed are rising faster than usual.
There are going to be unlimited sessions of stimulus by governments the world over. The U.S. Fed has hinted at unlimited quantitative easing. This means that there is no limit on the next round of the Fed’s intervention in the markets through the continuous bond purchase.
This move has been seen by many as bullish for both Bitcoin and gold. The chaos and confusion that everyone is facing is bound to continue about the COVID-19 pandemic.
COVID-19 Will Cause More Problems
There isn’t a viable treatment regimen and a vaccine or cure for the coronavirus. Investors are going to look towards safe havens. Places where they can protect their monies in such uncertain times. This is where Bitcoin and Gold come in. They both serve as hedges to those who place their value in either asset.
There are many divergent views as to which asset class will prevail at this time. The traditional conservative investors believe in the gold standard. They think that this will be the standard that everyone will flock to.
Many in the younger generation believe in the trustless nature of Decentralized Ledger Technologies (DLTs). Cryptocurrencies like Bitcoin are a good alternative to gold. As such, Bitcoin (BTC) price will prevail at this time.
Others believe that cash and other paper investments remain King. This particular set of individuals believes in the security of their investments as guaranteed by the government. As such, they don’t care much for the other two groups of people.
Invariably, Bitcoin (BTC) price will still rise and give gold a run for all its worth as the bitcoin halving event is less than a month away. $8,000 is the next psychological resistance level for Bitcoin (BTC) prices to breakthrough.
At the time of filing this report, Bitcoin (BTC) price was at $6918 (+2.57%).