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Gold Rises as Bitcoin Prices Slump, Who Will Win?
Gold Rises as Bitcoin Prices Slump, Who Will Win?

Bitcoin prices in the past few days have begun a long-delayed correction after several months having gained value with parabolic rallies that took the price of the crypto assets from a trading range of between $ 3,000 and $ 4,000 to near $ 9,000. But when the bitcoin crypto currency began to fade, the price of gold had begun to rise, closer to reaching new highs for several years, in the face of rising concerns over the upcoming global economic storm on the economic horizon. In recent weeks, gold as the preferred hedge asset during the economic downturn was given the first real opportunity to get its value back. The increase in gold prices is in line with increasing concerns about the continuing trade war between the US and China, and the impact of these two super powers on the larger global economy.

When investors in the stock market and other traditional markets try to take risks and protect capital from potential destruction, many financial analysts expect assets held to be safe like gold are usually increasingly held as hedges. However, the recent "#DropGold" television marketing campaign from Grayscale Investments and a parabolic surge in the price of Bitcoin challenged the use of gold as a hedge. That all changed this week, because the price of Bitcoin finally began to decline after a pause in the parabolic rally. According to eToro Mati Greenspan analysts, gold has skyrocketed and nearly reached its highest level in several years. Meanwhile, Bitcoin struggled to maintain its price at $ 8,000 after being rejected at $ 9,000, and currently the bitcoin is trading at $ 7,600. With gold picking up momentum, while bitcoin is diminishing, the effectiveness of Grayscale's marketing efforts must be questioned. Investors do not drop gold, as suggested by the campaign. In fact, the opposite might occur because crypto investors are increasingly exposed to gold as an opportunity to diversify portfolios.

Greenspan's EToro itself offers CFD contracts for gold, and recently a Bitcoin-based margin trading platform, PrimeXBT, added spot contracts for gold and silver as part of expansion into forex, commodities and more, as demand from crypto investors increased. . At worst, businesses that offer crypto currencies to investors exposure to precious metals have begun to withdraw the offer. This further shows that gold investors are not interested in bitcoin, while bitcoin investors may be very interested in gold. The two assets should attract many comparisons, both of which have limited supply to be mined and can be used as a means of exchange and store of value. Often, the second comparison triggers debate, does bitcoin potentially reverse gold market capitalization, which will bring the price of bitcoin to more than $ 350,000 per BTC.