Gold Beats Bitcoin in Race for 'The Best Safe Haven Asset'

SEATTLE (Scrap Monster): The fourth quarter of 2018 proved that bitcoins are no substitute for gold as a safe haven asset. According to recent report published by the World Gold Council (WGC), cryptocurrencies like bitcoins behaved like risky assets and lost their value during the quarter, whereas gold delivered a solid quarter, taking best advantage of the drastic fall in global stock markets.

The bitcoin prices nosedived 55% during the quarter. On the contrary, gold prices rallied 9.4%. Also, the market value traded in the bitcoin futures market declined sharply during the quarter. This is in contrast to 2017, when bitcoin prices had witnessed parabolic rise, skyrocketing by 13 times as compared with 2016. With gold rising only 13% in 2017, analysts had even gone to the extent of saying that gold could be replaced with cryptocurrencies in future.

However, the extreme volatility exhibited by bitcoin in 2018 has once again proved that cryptocurrencies lack the qualities associated with proven safe haven assets like gold. The poor performance by bitcoin in times of market uncertainty is sure to force investors to rethink on their investment in them.

In WGC’s view, gold is less volatile than cryptocurrencies and has a more liquid market. The trading of gold takes place in a well-established regulatory framework. Moreover, gold has been the investment choice by many and has little overlap with cryptocurrencies on many sources of demand and supply.