Bitcoin and gold can happily coexist and the cryptocurrency would not rival the yellow metal, according to Charles Morris, chief investment officer at Newscape Group, a London-based financial services firm.
Writing in the latest issue of Gold Investor, published by the World Gold Council, he said that in March 2017, when the price of Bitcoin surpassed the price of an ounce of gold for the first time, many thought gold had found a digital rival. “It hasn’t — this is merely a nominal coincidence”, Mr. Morris wrote.
‘Tenfold rise’
While the Bitcoin market was small and growing, the gold market was deep and enjoyed unrivalled stability, he said. Observing that about $1.5 billion changed hands daily over the Bitcoin network, Mr. Morris wrote the value had risen tenfold in the last three years — with all transactions bypassing the banking system. “Whatever that money is up to, most thinking folks acknowledge the blockchain behind it is a technological masterpiece.”
While gold had lost much of its former role, Mr. Morris argued that it had maintained its credibility and status with central banks and other long-term investors. While gold offered no annual income, the market remained vibrant, signalling it was a true and safe haven. “Gold should continue to thrive in the digital age as it remains the ultimate store of value.” Blockchain technology is immutable, meaning past data cannot be changed, making it an important point of reference. “Using blockchain, modern communications enable gold to be redistributed around the world at the touch of a button, without ever leaving the vaults.”