The Bitcoin correction has been short-lived, with only a couple of days spent below five figures. Gold and related stocks are also climbing — but they’re way short of the king of crypto.
Digital asset markets have regained their composure today with a total market capitalization gain of $15 billion over the past 12 hours or so. It is now close to breaking the psychological $300 billion barrier once again.
Bitcoin Bounces Back
Bitcoin is back in the driving seat again with a move above $10,000 during late trading on Tuesday. The move has added almost six percent on the day for BTC — which is set to resume its rally.
The market-leading cryptocurrency is back at resistance but could easily shift gears to the next level, just above $10,400. So far in 2020, it has made an impressive 42 percent gain while outperforming most traditional assets and stocks.
Goldbug and serial Bitcoin detractor Peter Schiff conveniently ignores this fact when raving about the performance of gold.
Gold Ready to Rally
Gold has had an impressive run recently, topping $1,600/oz for the first time since 2013. [GoldPrice] It is currently up 5.25 percent on the year — a move that has been dwarfed by ‘digital gold.’
Schiff added that gold stocks have not rallied yet but all indications are that they are about to. Central bank currency devaluations, quantitative easing, and overwhelming national debts will be bullish for gold stocks.
According to reports, gold companies are poised to expand profits in the intermediate to long term following a period of fixing balance sheets, right-sizing, and de-risking. [SeekingAlpha]
Additionally, there is a new discipline on the gold mining industry as mergers have tightened exploration spending and consolidated operations. This will have the effect of constraining production which will add to the notion of scarcity.
All signals suggest that gold and related stocks will have a good year in 2020 — but Bitcoin is likely to do better.
Bitcoin Over Gold
Bitcoin is largely favored over gold by younger generations of investors, which are now outnumbering their older peers.
Bitcoin has a number of added advantages in that it can be transported anywhere in the world, in any quantity, in a matter of minutes. It is completely divisible without physically melting it down, in addition to being trustless, permissionless and private.
Bitcoin cannot be faked, unlike gold, and demand will increase due to its inbuilt scarcity through halving events.
Gold is a good investment in times of adversity but Bitcoin is a no-brainer, especially for younger, tech-savvy generations that are already wary of banks and have a bit of cash to invest.