Ahead of the United States’ second round of economic stimulus, gold and Bitcoin exploded as the dollar fell. According to financial analysts, after setting a new record the gold rally may be peaking, leaving room for the cryptocurrency market to catch up to precious metals.
Here are five important factors why Bitcoin will outperform gold in the long haul and how that may extend into altcoins.
Mad Money’s Jim Cramer Says Charts Call For Gold Rally Peak
Only a mere few weeks ago, NewsBTC published a story about Bitcoin and gold trading neck and neck in terms of two-year performance. However, the gold rally has since picked up even more bullish momentum, and the asset exploded to a new all-time high.
The rally helped the precious metal beat out Bitcoin in terms of overall performance, but gold may soon be peaking, according to several industry analysts.
Related Reading | BTCUSD and XAUUSD Neck and Neck In Two-Year Safe Haven Arms Race
Mad Money’s Jim Cramer says that precious metal price charts are “very precarious.” Market strategist and published author Carley Garner told the CNBC host that silver and gold could have “one last leg up,” Cramer explained. She added that another leg up could even be “substantial” but that the rare metals would “come plummeting back to earth.”
Gold (XAUUSD) Versus Bitcoin (BTCUSD) Comparison | Source: TradingView
The assets pulled directly from that earth, have a limited supply that makes them a hedge against inflation and investment of choice during economic distress.
Cryptocurrencies like Bitcoin were designed with certain attributes found in precious metals in mind. It is for this reason that the first-ever cryptocurrency is often referred to as digital gold.
But while XAUUSD price charts suggest a peak is coming, Bitcoin is suddenly spiking, suggesting that profit-taking in precious metals could be flowing into crypto.
Bitcoin offers several attributes beyond what metals provide, which could act as a catalyst for overperformance in the cryptocurrency market compared to gold and silver in the days to come.
In the long-run, gold’s entire market capitalization beyond its industrial demand is latent market cap for #Bitcoin which is superior across all properties of money: divisibility, durability, portability, recognizability, and scarcity.
— Robert ₿reedlove (@Breedlove22) July 28, 2020
Bitcoin To Outperform Precious Metals For These Five Important Factors
It’s not just Mad Money host Jim Cramer and analyst Carley Garner that think XAUUSD and XAGUSD are close to topping.
Rich Dad, Poor Dad author Robert Kiyosaki claims that “respected gold bull” Dennis Garman has ditched his position. Kiyosaki also agrees, although previously had called for targets of $3,000 or more per troy ounce.
The entrepreneur and investor also believes Bitcoin will reach $75,000, and silver $50 as capital moves out of the yellow-colored metal in search of more green.
In response, Parallax Digital CEO Robert Breedlove reveals five critical factors that set Bitcoin apart from the precious metal. These reasons are also exactly why Bitcoin is poised to outperform gold in the days ahead, perhaps henceforth.
Related Reading | Are Altcoins Silver To Bitcoin As Gold? Unusual Correlation Discovered
These attributes include “divisibility, durability, portability, recognizability, and scarcity.”
Precious metals are commonly sold as bars or by weight, ranging from grams to ounces to kilos. Bitcoin, however, is divisible down to the satoshi, or 0.00000001 BTC.
Metals tarnish, can bend, and as jewelry proves, are malleable and melt. There’s no physical form of cryptocurrency to damage, as they exist only in cyberspace.
Gold is heavy, takes up space due to its physical mass, while crypto can be moved in light speed and stored without a physical footprint.
Precious metals are commonly counterfeited. Bitcoin has many imposters and wanna-bes, it cannot be faked.
Finally, only 21 million BTC will ever exist, while the supply of gold left unearthed will likely forever be unknown.
Satoshi Nakamoto set out to create a new form of digital currency that closely mimicked certain properties of precious metals, and succeeded. Not only does Bitcoin stand ounce-against-ounce with gold, but it also beats it in several ways. And that’s why the crypto asset is likely to perform the precious metal from here on out.
Silver (XAGUSD) Versus Altcoin Market Comparison | Source: TradingView
In a surprise twist, the altcoin market cap chart looks strikingly similar to silver. Both silver and altcoins have recently shown strong performance. Could a similar argument be made between the two vastly different assets?