Bitcoin's appeal as an alternative store of value asset is strengthening, according to analysts at Germany-based investment bank Deutsche Bank.
Bitcoin has long been considered by supporters as digital gold due to its limited, predictable supply and use case as a store of value outside banking influence.
While bitcoin has gained 144% this year, gold is up 22%. Both assets seem to have benefitted from the inflation-boosting monetary and fiscal policies launched by central banks and governments across the globe to contain the economic fallout from the coronavirus pandemic.
The cryptocurrency has rallied over 25% this month alone despite hopes for a swift global economic recovery on potential coronavirus vaccines and improved risk appetite in stock markets. Gold, however, has lived up to its reputation as a haven asset by falling 1% so far this month.
The divergence between gold and silver on the one hand, and bitcoin on the other, is one of the oddities of this month, according to Reid. U.S.-based drug makers Pfizer (PFE) and Moderna (MRNA) announced encouraging results for their experimental coronavirus vaccines earlier this month, triggering a rotation of money out of gold and other haven assets and into risk assets.
At press time, bitcoin is trading near $17,550, while gold is changing hands at $1,860 per ounce.
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