The benefits of owning Bitcoin over gold have been discussed countless times. These two assets are actively considered by investors when it comes to which one is the best store of value. When Bitcoin fell last week, the discussion began again about the benefits of owning a relatively stable asset like gold versus a volatile Bitcoin.
Over the past seven days, the price of Bitcoin has fallen by more than 30%. This has led the rest of Cryptocurrencies to follow this trend. The fall in the value of Bitcoin has been happening since the beginning of the year. As a result, the digital asset, which had outperformed its physical counterpart for a long time, fell behind it again.
Even though gold returns are not high on a yearly basis, it remains positive while Bitcoin returns decline. On Tuesday, gold rose 0.6% year-to-date. As for Bitcoin, the Cryptocurrency is now down 55% since the beginning of the year.
Bitcoin’s volatility is now worrying financial market participants, although it has also been one of the biggest pulls for those who have invested in the asset. It surged over 50% last year to an all-time high of $69 000 before dropping over the next six months to a low of $17 600.
While the sharp sell-off rocked Bitcoin, gold has been more stable. So when it comes to talking about which of these assets serves as the best hedge against inflation, gold has now outpaced Cryptocurrency.
Is Bitcoin falling?
Bitcoin’s recovery over the past few days has been encouraging. After hitting a low of $17 000, the recovery has been solid since then, aside from a few dips.
Despite this, selling pressure remains high and new selloffs are shaking the market. However, support is starting to form above $18 000.
There is also a possibility that the price of the digital asset will fall below the high of the previous cycle. Analysts say the digital asset has not reached the bottom of the bear market. Combined with the fact that Bitcoin has previously dropped at least 80%, the bottom is likely to reach around $13 000.
The bottom is expected to occur about 15 months after the previous halving, meaning a bottom sometime in Q4 2022.
Bitcoin is currently trading at $21 313. It is up 1.93% in the last 24 hours with a market capitalization of $405.8 billion.
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