In recent years, Bitcoin has often beencompared to gold because both forms of wealth based on monetary value utility and scarcity. Furthermore, both Bitcoin as gold can be obtained through a process called "mining" . But after finding that the price of gold continues to fall year after year, it's time to check out the comparison with Bitcoin, since the digital currency has remained relatively stable throughout the year.
The price of gold approaching its lowest in six years
Although the price of an ounce of gold is still maintained over $ 1,000, the investor interest in acquiring the precious metal appears to be shrinking. In fact, the price of gold is approaching its lowest point in the last six years , which was US $ 1,045 per ounce.
Typically, gold buying by investors increases every time you get nervous. This trend not only verified in long cycles, but year after year as we approach the holiday season. But for some reason, this trend has not been seen this year, and now people are more willing to sell than to buy gold.
According to CNN Money, this massive and persistent sales is due to several factors.The main Chinese stock market is sinking , why the moneyed elite are less willing to spend much money in precious metals. Despite annual economic growth, China's economy is still very unstable at this time.
Second, the US dollar rising contradicts many financial predictions released earlier this year . Given that much of the world gold is traded in dollars, the high value of US $ resulting in a reduction in the price of gold. It appears that the upward trend of the US $ will continue for a while, which could bring the price of gold to fall further.
And last but not least, owning gold does not generate any interest for the owner. While that might be perfectly acceptable after the financial crisis of 2008, the recent announcement of the Federal Reserve becomes less attractive to own gold. For the first time in seven years, it has scheduled an increase in interest rates, making the dollar more attractive to investors.
Stop comparing Bitcoin with gold
Many financial experts have been drawing parallels between Bitcoin and gold, although very few are valid today. Unlike the declining price of gold, the bitcoin has remained fairly stable throughout the year, which is a sign of maturity .
Since Bitcoin is a convenient way to transfer wealth around the world in seconds form ofdigital currency has become more attractive to investors . Wealth transfer by moving gold is risky, expensive, cumbersome and is subject to complicated administrative processes while bitcoins transfer takes a few seconds to complete.