The world gold Council (World Gold Council, WGC) has published a report which said that gold is “very different” from crypto-currencies and in particular bitcoin. Among the major differences appear less volatile, more liquid market and trades in a regulated environment.
According to the WGC, after the collapse of the Bretton woods monetary system (in which currencies of participating countries were pegged to gold) in the 1970s the price of gold grew on average by 10% per year, while its volatility decreased.
The price of bitcoin, on the other hand, in recent years, was extremely volatile, about 10 times more than the price of gold, expressed in U.S. dollars. Thus, bitcoin is not very good as currency, not to mention the storage cost.
The volume of trade bitcoins is also very low compared to gold and other currencies. According to the statistics of bitcoin, this figure reaches an average of $2 million a day, and it is less than 1% of the total volume of the market of gold of around $250 billion a day.
According to WGC, demand for gold is “variety”, “the relevant requirements”, in General, gold is a “proven and effective” investment option, which also showed good results in periods of inflation.
In addition, the price of gold and demand for it are not showing any signs that they are suffering from competition with cryptocurrencies. So cryptocurrency rather compete with each other, and not with gold.
“Until recently, Bitcoin has demonstrated incredible momentum, but its goal as investments seems quite different from the gold. Cryptocurrencies have yet to test in several markets,” concluded the authors of the report WGC.
As for the blockchain technology, in its respect, the Council took a more supportive position. According to the authors of the report, this technology is “truly new,” and could be useful in the financial sector and beyond – including the industry gold.
Recall that bitcoin has already predicted the fate of the substitute for gold. So, earlier this month, a well-known cryptoexpert Mike Novogratz said that bitcoin will rise to $8 thousand and become “digital gold”. And later the founder and head of investment funds in Digital Currency Group and Grayscale Investments Barry Silbert noted that in the future VTS can replace gold as a store of value.