The head of trading for the Asia Pacific region at Oanda – foreign exchange (FX) trading firm, Stephen Innes, said that jump in the prices of cryptocurrency such as Bitcoin (BTC) will lead to spark the price of gold in the coming days.
In an interview, the analyst said that there are a lot of people in this game of cryptocurrency. If a situation comes where the price of BTC collapses, if the prices went near $3000, then the things are going to be completely messed up and the miners will start looking for the exits. The coins are not going to be as attractive as they were. Meanwhile, the price of gold will start jumping higher and there will be an inverse relationship between the price of BTC and the gold.
Gold and Crypto
There is a constant graph of gold where it has been seen that the value of gold is decreasing since 2011, from 1800 USD to at present 2100 USD. On the other hand, the value of BTC has increased significantly, from $30 to $4200, i.e. around 13,900 percent increase in the last seven years. However, the prices of BTC were up before the collapse. AltCoinEra has covered all the fluctuations of BTC prices in its reports.
As per the analyst, there has been seen an inverse relation between the crypto and gold. He also said that the prices of BTC rise with the decline in the prices of gold.
Contradiction in the Relation
Since the last year, it has also been seen that the price of gold hasn’t increased with the downfall of the crypto market. What more strange about this relationship is the price of gold has dropped constantly since January, from $1,360 to $1,220.
Therefore, it will be wrong to say that a drop in the price of crypto will lead to an increase in the gold price. As per previous year graph, there is no such correlation between the two assets.
Experience investors believe that gold can continue to be a viable asset especially when there is a time of volatility. However, among millennials, a trend of the cryptocurrency, blockchain, and fintech is expected to run for a longer period.