Gold price reaches 7-year high. Can Bitcoin keep up?

Since the beginning of 2019, gold has again been on everyone’s lips. The price was able to increase significantly and broke an important resistance in summer. Since then, the precious metal has experienced a steady price increase. In February, another important resistance of March and April 2013 was overcome and a new 7-year high was reached.

The price entered the weekend trading break at $1,643 an ounce (31.1 g). As the euro has lost much ground against the US dollar in recent years, the price of gold is currently even forming all-time highs there. To date, an ounce has never cost 1,516 euros.

A possible cause for the price increase in the last few days is often mentioned as the concern about the corona virus CoVid-19. It is believed that the precautions taken to combat the disease could have a serious impact on the economy, and so the company is turning to so-called “safe haven” investment opportunities such as precious metals. Furthermore, many market observers say that a sustained increase in the price of gold is long overdue. For almost 10 years the metal has been in a sideways trend. Since then, inflation has taken place and the gold price must be adjusted.

 

What is the situation with digital gold?

When gold reached its all-time high of around $1,900 in 2011, Bitcoin already existed. In the summer of the same year the first Bitcoin bubble burst at a price of around $31. Since then, Bitcoin has grown strongly and reached its all-time high of around $20,000 towards the end of 2017 in the course of a major cryptorally.

While the precious metal floated relatively stable, the crypto currency experienced dramatic price fluctuations. In the current year Bitcoin is clearly ahead. Those who bought the cyber currency on January 1, 2020, are now in the plus at around 36%. Those who bought gold on 1 January can post a profit of around 12 %. This means that Bitcoin has performed about 3 times better than gold this year.

Of course these figures should be treated with caution. History has shown that Bitcoin can also collapse extremely and that the losses incurred are unparalleled. Bitcoin is still the riskier asset class. Although the risk is higher, the potential gains are also higher.

 

Peter Schiff uses situation for side blow

Although gold has performed significantly worse than Bitcoin this year, legendary gold bull and Bitcoin critic Peter Schiff has used the rise in the price of his beloved asset, gold, to make a side blow to Bitcoin’s fan base in recent days. In a Twitter poll, he had users guess who will reach the $3,000 mark first, Gold or Bitcoin.

For Bitcoin this would mean a slump of about 70% and for Gold an increase of about 82%.

Almost 13,000 users took part in the survey, the result can be seen in the embedded tweet. The Bitcoin critic has rhetorically formulated the question very cleverly at the expense of Bitcoin.