Bitcoin’s popularity among investors has grown over the last few months as the perception that the leading cryptocurrency is a safe haven asset continues to grow.
Faltering money markets have pushed investors to seek other ways through which they can secure their holdings.
When the effects of geopolitical conflict reached the money markets, investors turned to government bonds. The bond market has been flooded and bond yields have gone down as a result.
For some investors, government bonds are still a viable investment solution despite the drop in yields.
The rise in Bitcoin prices has prompted other investors to place their bet on the leading crypto asset as they hope to reap the high rewards that are consistent with it.
Comparisons of Bitcoin and gold
As the popularity of Bitcoin among investors continues to soar, there have been debates comparing the cryptocurrency to gold.
The discussions stem from the argument that Bitcoin could become the new global reserve currency.
Mark Valek, in a recent interview with Max Keiser, said that Bitcoin is a tremendous invention and he wouldn’t be surprised if one day it does become the global reserve currency.
He added that even if it does not become the reserve currency of the world, Bitcoin has already changed the way people understand and relate with fiat currencies.
Keiser expressed the opinion that Bitcoin has moved from being an activity for tech-savvy individuals to being an important part of present day financial systems. Economic infrastructures around the world are changing, and Bitcoin is a factor in those changes.
Valek chimed in on that point and said that the store for value character of gold is similar to that of Bitcoin.
This characteristic will help Bitcoin to become a final issuance in the backing of central banks. Central banks need bailing out from the effects of falling bond yields, and this asset may be the key.
When people consider the value of assets, they look at ones that can be idealized as money and Bitcoin fits the bill. The crypto asset is currently used to make purchases of different kinds, and hence, it is easy for people to accept it as a reserve currency if need be.
The cryptocurrency has also been more or less consistent with maintaining its value this year, and this is a key factor that is considered in an asset before it becomes a mainstay part of financial systems.