The meteoric rise of bitcoin prices has prompted many investors to opt for it as a way to diversify their portfolios. The traditional and usually stable hedging asset, gold, has started to lose some of its shine when compared to the high returns that cryptocurrency (specifically bitcoin) seems to offer. But does bitcoin have the potential to replace gold as a safe haven to park your cash? Read the article to find out.
Nudged by the ongoing conflict between Ukraine and Russia, the price of gold has been seeing a jump globally. As of March 7, gold’s international price was at a recent high of USD 2000 per ounce. India too saw an increase of almost 5%. It’s not the first time this has happened, although it seems a bit more pronounced due to the recent sanctions on Russia, which is a large producer of gold. Bitcoin, on the other hand, saw a sharp decline (almost 8%) on the first day of the invasion and then bounced back almost 12%.
Considering that many crypto enthusiasts consider bitcoin as being equivalent to ‘digital gold’, the contradictory way these two can behave in relation to the global financial markets surely deserves a more detailed look.
The allure of gold
If you consider the hist...