Today, gold has nearly lost its status as a safe haven for capital. In just 1 hour, the price of gold fell by almost 5%. The price dropped from $1764 to a low of $1680. It took gold more than 9 hours to recover to the area of $1740 area.
Among the members of the crypto community, questions immediately arose whether gold could continue to fulfill its functions of hedging capital. But the “digital gold” Bitcoin today, on the contrary, demonstrates growth and is trading above $45000.
Gold has proven its ability to hedge risks during the COVID-19 pandemic, during the depreciation of the US dollar, and during the formation of the cryptocurrency market. Thanks to its function, gold peaked at $2100 per ounce. However, this was followed by a trend reversal, and gold began to gradually fall in price. And the recovery of the global economy forced investors to sell gold after the pandemic and invest in the real economy.
If you compare the price charts of gold and Bitcoin, you will notice that the price of gold has been falling since the beginning of this year. The fall in prices intensified in August. While the price of Bitcoin has been on the rise since mid-July.
Analysts predict that in 2021 the price of Bitcoin will rise by 50%. At the beginning of the year, the price of Bitcoin is up 40%, while gold has fallen in price by 10.5% since the beginning of the year.
Today’s fall in the price of gold has played in Bitcoin’s favor. Investors have become even more convinced of Bitcoin as an alternative to gold, especially in times of such economic uncertainty.