Gold vs Bitcoin, what has been the better investment in 2020? What is the outlook for the next couple of weeks, and can we clear up some of the fundamental differences and similarities between both? That is what we will cover in this article.
First, we will take a look at Gold and Bitcoin prices, and their ratio, followed by an exclusive interview with the cryptocurrency specialist and trader, Glen Goodman.
Gold vs Bitcoin
Bitcoin and Gold prices are both having a good year as people flock to them to hedge against possible inflation driven by central bank quantitative easing. The ongoing coronavirus crisis is also pushing investors towards these assets.
At the time of writing, Bitcoin prices were up by 67.62% in 2020, while gold is up by approximately 24.94%. From this perspective, it is clear that Bitcoin is the winner, but the volatility is also higher in Bitcoin prices.
From the start of 2020, gold prices were down by 3.72% on March 19, while a Bitcoin holder would have to endure a whopping 31.92% slide. It is these types of swings in Bitcoin that limit the usage of leverage, while most gold traders will always rely on leverage, and this evens out the return for the year.
What can we expect to see next in the Gold vs Bitcoin debate?
The ratio between BTCUSD and XAUUSD shows that the year 2000 started with one bitcoin enabling the purchase of 4.7 ounces of gold. Today, the same bitcoin buys 5.91 ounces, and that is a gain of 25.68% in favour of Bitcoin.
The ratio is now nearing the February 2020 high of 6.70 ounces of gold per Bitcoin, a breach to this level could lift the ratio to 8.12 ounces. In other words, bitcoin prices stand to gain more than gold prices on a break to 6.70. Until that point, the rate looks to remain range-bound between the July lows of 5 and 6.70. A breach to 5 ounces per Bitcoin would trigger a slide to the April low at 3.78, i.e. gold prices here would outperform Bitcoin.
Bitcoin vs Gold: Weekly Chart
What about the long-term factors driving Gold and Bitcoin?
Are you new to Bitcoin and maybe even gold? What are the similarities and differences between gold and bitcoin? What are Bitcoin’s pitfalls and benefits? Which asset would perform better in a hypothetical World War 3 scenario?
These questions and much more are discussed between ATFX and InvestingCube’s Alejandro Zambrano, and former ITV-news reporter, crypto and shares trader and specialist, Glen Goodman. Scroll to the top to watch the video.