World Gold Council (WGC) Thinks Bitcoin, Crypto Assets Are Not a Substitute For Precious Metals
Will Bitcoin be the new digital gold? The World Gold Council does not seem to think so, which surprises nobody in the whole world. The WGC is the organization that oversees the gold industry and it has emitted a very anti-Bitcoin report last month.
In the report, the company argued that cryptos are very different from gold, which is way less volatile and has a much more liquid market, as well as regulatory approval. For instance, they argue that the price of gold has risen 10% yearly since the end of the Bretton Woods monetary system, which was used to peg major currencies’ prices to gold.
Its volatility, the report also states, are considerably lower than Bitcoin, which lost 86% of its value last year. This is the main argument against Bitcoin. It is too volatile, which would make it not as good as gold. According to the council, Bitcoin is not a good currency nor a store of value.
The volume of trades is also considered to be very low when compared to gold. Bitcoin has around $2 billion USD in trades daily while the gold market has more than $250 billion USD in the same day.
Gold, according to the World Gold Council, has a more diverse demand, a more responsible supply and it is “tried and tested effective”, being especially good protection in times of high inflation. Also, gold prices are not dropping due to the competition with cryptos, which makes the organization remain very happy with its potential.
The report concludes by affirming that Bitcoin has had a remarkable performance recently but that its purpose is to be very different from gold. Cryptos are yet to be tested in several markets before they can get on the same level as gold and fulfill its prophecy of becoming the “digital gold”.
Also, the report actually acknowledges that the blockchain is a very innovative invention and that it could be used across many services, including the gold industry.
Is Bitcoin digital gold? The World Gold Council does seem to think so, but what do you think?