Comparisons between gold and bitcoin continue to be drawn, even though these two assets are not exactly alike. The outlook for both speculative assets is looking quite good for now, even though it is hard to predict what will happen next. Both assets can see significant value gains throughout 2017, even though it remains to be seen if that will be the case. Demand for non-currency assets is expected to soar in 2017.
With the year 2016 being quite positive for both gold and bitcoin, one wonders what the future holds. It is possible both asset classes will continue their upward trend over the coming months. With bitcoin outperforming gold in 2016, the battle lines have been drawn, so to speak. Gold has quite a strong year as well, even though its market seems to be more volatile than it has been for some time.
Safe Haven Assets Will Have A Positive 2017
Things are looking quite positive for the bullion sector. The new Shariah Gold Standard will have a positive impact on physical gold demand. After all, this new standard creates investment opportunities for 25% of the world’s population. Secondly, gold is incorporated as a settlement currency between oil-producing nations. Most energy sales to China are settled in gold due to the fledgling Yuan value.
Bitcoin has seen its value increase by quite a margin in 2016. Even though there has been a retrace on the charts ever, bitcoin has stabilized over the past week. With less margin trading opportunities in China, volatility will be reduced to a minimum. That said, one could argue bitcoin is behaving more like gold, as it is a hedge against geo-political and monetary risks.
The year 2017 will be an overall positive for both gold and bitcoin, according to various experts. With the Trump presidency, the fallout of the Brexit, and ongoing EU debacles, demand for alternative assets will only grow. It is difficult to predict how this will affect the gold and bitcoin prices moving forward, but a value increase seems likely. Saxo Bank even believes Russia and China may start to accept bitcoin as an alternative to the US Dollar.
There will always be a degree of rivalry between bitcoin and gold as the “king of safe haven assets”. Both assets can peacefully co-exist, and provide investors and consumers with a hedge against future financial instability. Bitcoin has more use cases than gold in terms of spending power, yet remains somewhat “niche”. Gold is incredibly difficult to spend for regular purchases, yet has more of a mainstream appeal.
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