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Gold aims for decade highs which could also benefit Bitcoin

Written by  Jun 24, 2020

Gold this week reached a price not traded at since nine years ago, fueled by a rush to safe-haven assets.

Could the same surge in safe-haven interest that gold is experiencing soon translate into a boost in Bitcoin?

Gold Targets All-Time Highs After Reaching New Nine-Year-Record

This week, as economic uncertainty continues to create chaos in markets, gold set a nine-year high.

The XAUUSD pair traded at just under $1780 at its local high, but the precious metal ultimately is targeting $1800 and higher.

Demand for the hard, safe-haven asset has been growing over the last two years, starting with trade tensions between the US and China.

The recession and pandemic combined, has only added to the gold rush taking place across the globe.

Investors cash out riskier assets like stocks in favor of a stable asset with centuries of trust behind it.

Gold has been looked toward for ages for this very reason, as well as the asset acting as a hedge during inflation.

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When gold first decoupled from the dollar, it traded at $35 an ounce. Today, analysts are calling for anywhere between $2,000 and $3,000 an ounce.

But first, the safe-haven asset must break through resistance at around $1,800 to revisit previous record highs.

Rush to Safe Haven Assets May Benefit Bitcoin in The Long Run

The surge in interest in safe-haven assets like gold that acts as a hedge against inflation could be bringing more interest to Bitcoin.

And as things get even bleaker, with cases of the virus once again climbing and political tensions boiling over, Bitcoin may see an even bigger boost.

Although the cryptocurrency only exists digitally, due to its design, it is considered a hard asset like gold.

The precious metal has a finite supply, buried deep within the earn or held in vaults. Bitcoin is coded so that only 21 million BTC will ever exist.

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The exact figure known of BTC versus the untapped supply of gold may give the cryptocurrency even greater benefit.

Of those 21 million BTC that will ever exist, only a certain amount are in circulation. Many are lost forever on the blockchain, while the rest remained locked away in the protocol.

Miners unlock new BTC with each block added to the blockchain, and when this process finishing pumping out coins, that’s it.

This won’t happen until an estimated 2140, however, the scarce supply gives the asset added value even today.

Beyond acting as a safe haven like gold or a hedge against inflation, Bitcoin has many other benefits.

Its contactless usage, and ability to be stored beyond the physical world gives Bitcoin value over gold. Gold is even being adapted to be more like the cryptocurrency, so its value can thrive in the digital age.

If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.

Quite a controversial opinion, do you agree? Comment below or follow us on Facebook or Twitter.

Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by Cryptosavvy.co.uk. Readers should do their own research before investing funds.

Vincent Palmer

Our financial expert who concentrates on the financial markets news, to help us to have an overall view of the markets, which aids Crypto investment choices.

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