Investment groups in the asset world are looking to change their tactics as Bitcoin reached a new high of $9,400 this weekend. Those who have invested in the stock market and products such as oil and gold have not secured the same profit margins as they could have by investing in Bitcoin.
The question has been asked “What has powered this increase in Bitcoin?” There could be several reasons, including the US/China trade conflict, the new stablecoin launched by Facebook and even the Federal Reserve.
An imbalance in returns has been indicated in financial journals highlighting the increase to date in Bitcoin of 150% compared to the general stock market, petroleum, and gold shares which have all been left trailing behind. The American Stock Market Index, the S & P 500, showed gains of a double-digit percentage but the same could not be said for gold, that offered investors a return of less than 5%.
Gold Investors are left in the wake of the Bitcoin rise
The situation for investors in gold has worsened with the rising value of Bitcoin given that buying Bitcoin provides many added features including saving the asset to be traded at a later stage and it is these attributes that are attracting a considerable part of the market share.
Those who have been staunch supporters of gold are feeling downbeat about the precious metal following a lackluster performance in 2019. During this same period, Bitcoin has continued to shine.
The digital currency changes the face of gold
The #dropgold campaign launched by Digital Currency Group has had a further negative effect on the performance of gold. CEO of the company, Barry Silbert, outlined the worth of the company’s Bitcoin trust at $2 billion – the total value of Bitcoin in 2014. This market has grown to $164.7 billion in 2019 – growth that not seen in the gold market.
These financial instruments – known as asset classes – are set to play an essential role in expanding the options for investors, according to Barry Silbert, who believes that these instruments are ready to take the next step. Silbert also stated that by employing legal protection and trading programs, the crypto industry was growing in stature and becoming of age.
Rayne Steinberg, head of crypto investment management firm Arca said in a media statement that the flexibility of Bitcoin which he believes can’t be taken from you, can’t be exploited and can’t be knocked down, will create a massive demand for the asset.
Trading bitcoin and the regulation of the exchange
Bitcoin futures exchange Bakkt is set to put its contracts to the test in July, creating an even higher demand for Bitcoin. The recent trade tensions between the United States and China have been cited as one of the reasons for the increased requests for Bitcoin by larger capitalists.
Another financial analyst, Anthony Pompliano, indicated that Bitcoin is seen as an alternative investment fund as it operates on a different platform to other investment segments. SFOX, trading in Bitcoin, said that the cryptocurrency was in no way connected to the S&P 500, which is the primary reason that Bitcoin should manifest itself to corporate investors as an option.
Bitcoin is currently trading above $9,300 an increase of 4% since the same time yesterday.