After years of skepticism, it’s finally time for Bitcoin to shine

Gold has been used as a store of value for thousands of years. As such, it is widely used by investors as a hedge against the effects of recession and inflation caused by geopolitical tensions. In light of recent events such as the COVID-19 pandemic and the military crisis between Russia and Ukraine, many investors have sought alternatives to gold and other precious metals as a hedging option. As we move into the digital age, a future-proof alternative to gold is a prerequisite. In the search for a contender to challenge gold’s supremacy, Bitcoin (BTC) shines brightest.

The surge in gold prices is often an indicator of traditional stock market anxiety, and the current consensus among investors is that gold is currently overbought. Gold has risen to $2,000 as investors weigh the geopolitical and economic implications of the conflict in Russia and Ukraine.

On the other hand, capital funding for Bitcoin and other cryptocurrencies has increased over the same period. In the last three weeks of February 2022, venture capital buyers invested around $4 billion in the crypto space, according to research firm Fundstrat. In the first week of March 2022, startups in the crypto space received an additional $400 million in funding. The increase in funding shows that global investors are looking to add new areas of investment that they expect can withstand the fallout from conflicts in Russia and Ukraine.

The ongoing conflict has cost the peoples of both countries economically. Military activity in Ukraine has led to the closure of many businesses, which naturally hurt the local economy. Russia has been under economic sanctions, with bank accounts restricted, most forms of electronic payments unavailable, and the national currency devalued. Due to Bitcoin’s decentralized nature, there is still no uniform international law governing the cryptocurrency, which means Bitcoin retains its value regardless of the holder’s location. Bitcoin is legal in most countries, and some countries even declare it legal tender.

The crisis that has led to the displacement of individuals shows the potential impact that Bitcoin can have in the future. Bitcoin doesn’t need to be as expensive as shipping gold. Individuals do not have to declare their bitcoins when crossing international borders, nor do they risk confiscation or theft for shipping physical gold.

Bitcoin’s potential utility in times of need increases its appeal to traditional investors. This appeal is also growing, in part due to the recent decline in Bitcoin’s value. A key advantage of Bitcoin over other cryptocurrencies is mainstream awareness, as it has been around long enough to have gained support and recognition, and during that time it has even shown an unstoppable trend.

Stability in the face of crisis

The COVID-19 pandemic has proven to many that Bitcoin can also withstand the effects of the Ukraine and Russia conflicts. Covid-19 has caused economic downturns in many traditional sectors around the world. Coinbase reported that during the peak of COVID-19 in March 2020, $1.4 billion in fiat and cryptocurrencies flowed into wallets through its exchanges in a 24-hour period.

During the first half of March 2020, investors were quick to notice that Bitcoin managed to maintain its value amid a collapse in the value of traditional stocks. This increased the amount of money flowing into cryptocurrencies, culminating in an all-time high of around $60,000 in March 2021. For those skeptical of gold’s future viability, the stability Bitcoin demonstrated during that crisis increased its appeal as a hedge option.

Despite the recent explosion in the crypto space, the crypto market remains in the shadow of traditional market investments in terms of valuation. With mainstream exposure to Bitcoin’s potential, we see this gap closing much faster than initially expected. Investors are always looking for the latest viable options for their portfolios.

Bitcoin looks like the best option for many investors looking to diversify their portfolios due to its advantages over gold and the certainty of a digital future. This incremental flow of capital into the crypto space can only last so long until the floodgates finally open, allowing Bitcoin to replace gold as the new king of value preservation.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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