Gold-Backed Bitcoin to Become New Global Monetary System?
SputnikNews.com
09.12.2017
Amid declining public and market participant trust in central bank monetary policies and governmental meddling with the economy, the Bitcoin gold system could replace the agonizing remains of Bretton Woods.
Kristian Rouz – The ongoing rally in stocks, coupled with subdued market volatility, suppressed international gold prices this week. This, combined with the resurgence of the dollar, has produced bearish near-term expectations for gold among participants of conventional financial markets.
Gold prices eased 3 percent this week to $1,248.40/oz. – way below the psychological threshold of $1,300/oz.
This is a result of the dollar rally, supported by brighter GDP growth expectations in the US, President Trump’s tax reform and a declining demand for safe havens amid investors.
However, gold – the ultimate safe-haven asset – is already being priced in Bitcoin. The largest cryptocurrency has posted a stunning rise in value this year, from around $1,000 per coin to above $15,000. Now, Bitcoin’s accession to conventional financial markets might require some solid asset backing, as wild swings in Bitcoin’s value still fend off some investors.
Here’s when the gold-against-Bitcoin trade steps in.
In many ways, gold and Bitcoin are similar types of assets. Bitcoin’s value draws its main support from its limited supply, as it requires an enormous computer processing capacity to create new coins. The global supply of gold is rather tight as well, as gold mining is very labor and investment intensive.
“The marriage of cryptocurrencies and gold enables alternative choices to holding more than fiat currency,” analysts of the Hutch Report wrote.
“Although we can’t imagine fiat currencies to be replaced overnight, the promises of gold backed cryptos do look compelling moving into the future and they are certainly important to follow.”
The Rest…HERE
