"Money is gold, nothing else" - JP Morgan
In this video, Alidad Tash, managing director of 2NT8 limited, compares Bitcoin prices to that of Gold and Stock prices. Bitcoin boasts some of the same properties as the rare precious metal, and that is why it is often referred to as 'digital gold'.
People are losing faith in traditional institutions and are moving towards a more decentralised mode of currency.
This can be clearly seen in the sudden price rises throughout the year which has seen Bitcoin surge through barriers that previously, some people thought would never happen. Bitcoin started to gain the mainstream's attention around November 2020 where Bitcoin saw a rise to $16,913. Fast forward to January 2021 and Bitcoin smashed through the $30,000 barrier on its 12th anniversary with its price fluctuating between the $30,000 and $40,000 mark.
Watch Alidad Tash's latest insights on Bitcoin's surge:
The reason for the sudden popularity in Bitcoin and its rise in value was mainly due to several financial institutions backing the cryptocurrency as an asset class - similarly to gold. Several companies have shown their support for the cryptocurrency with Riffer, an investment firm, holding an estimated £550m in Bitcoin to counter the current delicate monetary system and financial markets which have really been negatively effected by the pandemic.
Furthermore, Paypal has also joined the show after allowing customers and businesses to use the cryptocurrency to buy, sell and trade on their platform.
Presently, there are over 18 million Bitcoins circulating in existence and the system has a hardwired maximum of 21 million coins. It will be interesting to see whether people will continue to invest in bitcoin since it is perceived that many people will consider gold and bitcoin to have no intrinsic value due to their inability to generate cash.
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