Bitcoin recently touched the bar of $7,000 and it is safe to say that it is at the rally again. The curse of the past few months has finally broken, and Bitcoin is gaining its previous market position. However, several crypto analysts believe that if the rise in the value of Bitcoin continues, its long-term effects will be stratospheric.
What If Bitcoins Steals From The Gold Market?
The increasing value of Bitcoin will lure market players from the gold market and force them to invest in the virtual currency market. According to Coindesk, Bitcoin currently has a market cap of around $128 billion. If 10 percent of gold trade shift to Bitcoin, it will almost triple the market cap of Bitcoin, said Gabor Gurbacs, the director of digital asset strategies at VanEck/MVIS. Furthermore, before reach such high in the market, Bitcoin needs to evolve and solve issues of consternation to investors. Currently, there are more than 100 different exchanges in the world, and once in a while Bitcoin prices from platform to platform. The unpredictability regarding is Bitcoin is still a concern.
Gurbacs recently talk with CNBC, when he stated, “Right now, gold has outstanding around $7 trillion. If you remove even 5 or 10 percent from gold’s market, Bitcoin has an advantage.” He added, “Currently, Bitcoin is used as a digital gold as it is a de-risk asset. People think, if they want to avoid systematic risk, they should invest in either gold or digital gold or Bitcoin.”
Not long ago, Bitcoin found new low $6,000 in late June, but it has gained momentum and this week, it registered $7,457. Investors believe that the crypto market has sufficient liquidity like any other commodity. Moreover, people think that in some way they can use Bitcoin into the financial ecosystem. However, only time will tell the truth.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]