Gold And Bitcoin Relative Value

 

Some of the investment flows that previously went in gold are now going into Bitcoin.

So it is high time a relative valuation between Gold and Bitcoin is performed.

Both gold and Bitcoin are non interest bearing assets. Their value is derived from what people think their value is and their usefulness in everyday life. For example gold is used as both a store of value and in jewellery production, which also serves as a store of value. Bitcoin is used in everyday transactions both a as a unit of account, means of exchange and store of value or the three main characteristics of money. Bitcoin, however is still far away from achieving real money status. Gold coins have been used as money since ancient times, but they are too expensive to produce en masse.

So the relative value of Bitcoin compared to gold will depend on how well either is able to replace money. Gold has been around for ages. Bitcoin is new, though and much hopes weigh on Bitcoin of becoming real money. Bitcoin is in electronic form, which is an advantage as most money today is either stored and moved in electronic form.

Actually, the winds today are both in gold and Bitcoin, cryptocurrencies' sails. The military conflicts Russia Ukraine, Israel Hamas are supporting the price of gold as a safe haven in times of conflict and of Bitcoin as a store of value and means of transfer of wealth in tumultuous times.

So, currently Bitcoin may be of better relative value than gold, but both the gold and Bitcoin asset classes are most probably going higher in price from here in the next two years, according to Wolfteam Ltd.'s corporate view.