With Bitcoin, and cryptocurrency trading in general, increasing globally, especially in African countries, there have been numerous concerns over the trade in Gold decreasing as Bitcoin trading is on the rise.
Gold is being dumped in favour of Bitcoin according to numerous analysts leading to Bitcoin stealing off a large market share of gold says Louis Schoeman from Forexsuggest.com
With the rates on bond rates decreasing, gold normally tends to increase yet with a drop in bonds, gold has simultaneously dropped as well, which is an exceedingly rare event.
It can be greatly attributed by the fact that Bitcoin trading has increased significantly. The price of gold has shown a steady trend but there have been declines more recently as the investment pool has moved more solidly into cryptocurrencies.
When looking at the past year, and considering unstable economic circumstances surrounding the emergence and spread of Covid-19, there have been numerous warnings of a global recession.
There have been many years where a bull market has been dominant, but investors have become increasingly concerned about the possibility of such a recession to such an extent that they have started shifting investments into a more stable safe haven.
During the pandemic, the trade in cryptocurrency has increased exponentially on a global front and such trends can be seen on a grand scale in various African countries as traders and investors have taken to the Crypto market.
These moves, from investing in gold to Bitcoin, have been to hedge against stock volatility pertaining to gold. Gold has always been considered a safe-haven asset due to its value and the fact that it is undeterred by supply or demand.
Bitcoin, as a blockchain-based cryptocurrency, shares numerous properties with gold and it has even been called ‘digital gold’ in the past. This is due to the weak relationship with other assets.
Why are Africans turning towards Bitcoin rather than investing in gold?
There is a limited amount of Bitcoin, as there is gold, and Bitcoin, like gold, is not issued by either a central bank or a federal government.
Bitcoin is a decentralized cryptocurrency which is generated digitally by the collective computing power attributed to miners who are both individuals and groups of people who work together in verifying transactions.
With a significant increase in Bitcoin trading, African investors have moved their investments to Bitcoin in an attempt to curb market volatility in addition to securing investments in an asset which is gaining more foothold over gold a little at a time.
While both gold and Bitcoin are highly valued and rare resources, the trend towards gaining more investment has been awarded to Bitcoin where African investors are concerned.
More African investors are leaning to the prospects that Bitcoin holds than what gold has shown historically. Due to many economic factors surrounding the global pandemic, more investors have found security in Bitcoin as a safe-haven for investment.
Whether this trend is set to continue, subside, or even reverse when the world emerges after the pandemic, is yet to be seen.