Bitcoin Is Gaining As An Inflation Hedge; Gold Too Shall Gain Support From It

Amid high liquidity infused by global central banks, there have surfaced inflationary concerns and because of it bond and equity markets saw high volatility of late. Now, this bodes well for the precious yellow metal which is considered an inflationary-hedge.

Now, given the limited supply, high US yield on account of inflation and emergence of new financial instruments such as bitcoin, gold lost some of its luster recently. And it lost a good 15% from the record highs of over $2000 per ounce.

On the other hand as bitcoin has been supported by major institutions and there are hopes that it may soon become a mainstream investment, it has gained close o $50000 per bitcoin

Gold's last year gain came in owing to economic downturn due to Covid 19

Much of the last year's gains in gold of over 20 percent are due to the economic slump, which pushes the appeal of gold- considered as the best safe haven. Also, the precious yellow metal does good when there are inflationary concerns.

And as the bitcoin showed high volatility, gold is likely to gain traction. Ipek Ozkardeskaya, senior analyst with Swissquote, in a recent report said, "Investors need a serious hedge against inflation, and bitcoin may not offer that".

GoodReturns.in