Bitcoin [BTC] clearly does not represent a substitute for gold either in theory or in practice, claims report

Bitcoin [BTC], the world’s largest cryptocurrency has always been compared to gold in terms of being a store of value rather than being a tradeable currency. This ongoing debate has been charged with comments from both sides of the pool; one part stating that gold will always remain the standard, while proponents from the world of digital assets claim that BTC is faster and more secure, and hence better overall.

The argument was stoked again when Adam Perlaky, the Manager of Investment at World Gold Council [WGC] stated that cryptocurrencies are no replacement for gold. Perlaky made his claims based on the volatility difference of Bitcoin and gold as well as the liquidity of their respective transparent market. The WGC official elucidated:

“Physical gold can be bought for a small percentage above spot price, and purchasing gold via allocated, physically-backed gold ETFs can cost less than a basis point over spot  As an example, Bitcoin charges many percentage points (we’ve seen as high as 9% on some exchanges) via the process of the bid/ask spreads and entering and exiting positions.”

The report also stated that Bitcoin investors have to wait for at least a 40 percent appreciation in their investments to receive at least the face value of their respective coins. Another point touched on by the WGC was the topic of regulation and the controversies surrounding Bitcoin. According to Perlaky:

“We have seen how lack of regulation has led to multiple exchange defaults and fraudulent activity, resulting in losses amounting to billions. The could begin to regulate cryptocurrencies by directly or indirectly discouraging investors’ ability to transact with them.”

Other factors that the WGC used to stake gold’s claim to be better than Bitcoin were supply, investment and demand. The report stated that gold’s diverse demand ranging from technology to jewelry was unparalleled to Bitcoin’s speculative nature. The longevity of gold was also discussed. The report added:

“Gold has a track record dating back to 600 BC, whereas bitcoin has only a 10-year track record.”

Although the report cited that Bitcoin and gold supplies were limited, it also pointed out that in the future, a better cryptocurrency could be released that could devalue BTC, something that could not happen with gold.

The post Bitcoin [BTC] clearly does not represent a substitute for gold either in theory or in practice, claims report appeared first on AMBCrypto.

Post written by our friend Akash Anand and Syndicated from ambcrypto
Ledger Nano S - The secure hardware wallet

Syndicated from ambcrypto

Add a Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.