The concept of electronic currency is relatively new. However, it makes life easier for many people. Cryptocurrency is a digital currency that allows you to carry out online transactions in order to exchange your assets conveniently. These transactions are recorded in a blockchain system, which is a public transaction database, aiming to make online trading more secure.
The value of cryptocurrencies has significantly increased during the past 2 years due to its increasing demand. Since it was introduced, many people have claimed that Bitcoin and other digital currencies are going to collapse soon. However, the prices have been on a constant rise since then.
Cryptocurrency and Gold
More and more people are investing in cryptocurrencies due to high return on investment. However, this trend tends to affect the value of gold. Many investors choose to invest their assets in cryptocurrency instead of more secure investments such as real estate, gold, and stock market. Although experts warn that the prices can come crashing down any minute, its lucrative prices are enough to grab the interest of investors.
It’s estimated that there is 82% correlation between the value of gold and any cryptocurrency. Many investors dump traditional means of investment for cryptocurrency. This leads to a slight decrease in the value of gold over the years. If the trend continues, the prices of gold may further decrease down the road. However, if the value of Bitcoin and other cryptocurrencies decreases, it’ll benefit gold.
However, not everyone agrees with this statement. The value of crypto currencies constantly varies with its demand. The increase in demand of digital currencies hasn’t impacted the value of gold over the years. Big investors continue to show interest in buying gold as an investment. You can find current values of gold at Gold Bullion Australia.
Furthermore, a majority of people who actively take part in trading cryptocurrency show almost no interest in buying or selling gold. Many people have invested their entire savings in crypto currency business during the past few years. However, most of these investors are amateur and only lured by the prices of digital currencies and they don’t intend to invest in gold or property.
The value of crypto currency currently stands over $10K USD. Its value may increase in the coming years. However, its demand has slightly shifted during 2017. As compared to 2016, fewer people have shown interest in mining coins. However, it doesn’t necessarily mean that the value of cryptocurrency will come crashing down this year only.
The correlation between prices of cryptocurrencies and the value of gold is vague. There are no definite statistics to explain whether or not an increase in demand of cryptocurrencies affects the market value of gold.
Cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Zcash, Dash, Ripple and Monero have revolutionised trading. Many investors have shown interest in digital currency. It’s said this increase in demand of cryptocurrency has negatively affected the value of gold. However, this claim lacks sufficient evidence. Only time will tell if cryptocurrency takes over gold as the leading investment medium.