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WSJ: Bitcoin (BTC) Trading In Step With Gold Amid Dow Jones Tumult

Bitcoin (BTC) Trading [Somewhat] In Step With The Volatility Index

Although Bitcoin (BTC) remains just hundreds of dollars away from its yearly low, the flagship crypto asset has regained boatloads of volatility in recent weeks. Some days throughout the past weeks have seen BTC, along with its altcoin brethren, swing by double-digits.

Interestingly, a report from the Wall Street Journal’s in-house crypto expert, Paul Vigna, has claimed that BTC has begun to trade in step with gold, accentuating how Bitcoin is likely the second coming of the orange(ish) precious metal.

Purportedly citing data from market analytics firm Excalibur Pro, the WSJ noted that while Bitcoin’s correlations to other asset classes are often non-existent, they remain “measurable.” More specifically, according to a scale that ranges from -1 to +1, BTC is currently trading at a 0.84 correlation to gold. This figure was gathered by market data pushed out over the past five days.

Using the same scale, Excalibur calculated that Bitcoin is trading at a 0.77 correlation to the Chicago Board of Options Exchange’s VIX index, which measures market volatility across equities (namely publicly-tradable stocks).

Explaining why the latter statistic, which highlights crypto’s correlation with the so-called “fear gauge” of the centralized financial realm, is pertinent, Vigna laid out a pertinent catalyst. The journalist drew attention to quantitative easing (QE) enlisted by global economic heavyweights, namely the U.S. Federal Reserve, that have “flooded global markets with liquidity,” while also decreasing benchmark interest rates to spur investments into riskier assets. As put by Vigna, “there is no riskier asset than a rebel currency (BTC).”

And with the Dow Jones, S&P 500, and Nasdaq all recently falling victim to the tumultuous action that Bitcoin faces every day, it becomes apparent why VIX has begun to line up with BTC’s fluctuations in value.

Alex Kruger, a prominent pro-Bitcoin economist, also made a statement about the relationship between QE and BTC in a recent Twitter thread. Kruger, based in Manhattan, New York, explained that QE was “partially responsible” for the birth and success of BTC. More specifically, the presence of QE sparked hate towards centralized bankers, while essentially encouraging consumers to siphon money into nascent/risky investment opportunities, such as cryptocurrencies and emerging markets.

But with QE starting to move away from the public spotlight, maybe volatility in the cryptosphere will begin to ease, especially Bitcoin’s value proposition as digital gold becomes realized.

Digital Gold

As mentioned earlier, in the recent influx of chaos into global markets, BTC’s price action has eerily begun to match up with that of gold. Although this could just be a coincidence, some have seen this as a sign that Bitcoin is truly becoming the digital embodiment of gold.

Per previous reports from Ethereum World News, Bobby Lee, the co-founder of BTCC and the brother of Litecoin’s Charlie Lee, took to Twitter to drop a few ‘knowledge bombs’, as it were. Likely referencing Bitcoin’s claim-to-fame as the digital equivalent of gold, and humanity’s de-facto go-to store of value, Lee explained that all BTC in circulation (market capitalization) is now one-hundredth the value of gold, a purported $8 trillion.

Keeping this relatively small valuation in mind, and his thoughts that Bitcoin’s unique nature as a scarce, borderless, uncensorable, and transparent store of value, the “defender” of Bitcoin alluded to the fact that over time, BTC could oust gold. And this most recent bout of correlation may be the beginning of Bitcoin’s trek to overtake the precious metal.

Title Image Courtesy of Michael Steinberg via Pexels

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Analysis: “Uncanny” Correlation Between The Long-Term Bitcoin And Gold Charts

“Uncanny Pattern Resemblance”

Since Bitcoin’s inception a decade ago, many have likened this decentralized digital asset to gold, with some dubbing Satoshi’s brainchild as a form of “digital gold.” This connection may be drawn due to the fact that the two individual assets are both stores of value, divisible, durable and secure.

Although there are similarities between the two assets that are as clear as day, as recently pointed by Nunya Bizniz, a lesser-known cryptocurrency proponent, there might be an “uncanny” line that can be drawn between the price action of gold and its digital counterpart.

On Thursday, Bizniz took to Twitter to bring up two separate charts, with the first being gold’s 43-year price history and the BTC’s price action throughout the entirety of its nine-year lifespan. Putting the charts (which are logarithmic/non-linear) side-by-side, it becomes apparent that there are clear parallels, or as Bizniz puts it, “uncanny,” even though the two stores of values may be inherently different at their core.

As seen in the tweeted image (above), the price action of both markets have seen similar bouts of exponential increases and subsequent ‘cooldowns’, leading some to ask if BTC is following in the footsteps of gold in some manner.

In a tweet posted just days after the original, the user brought up a zoomed-in chart of the two assets to back up the belief that they could be correlated. According to the tweet, if BTC is really following gold’s path, that could mean that the price of the foremost crypto asset could move under the ever so important $5,800 support level over the next few months.

However, as covered by Ethereum World News, Gabor Gurbacs, the director of digital asset strategy at VanEck/MVIS, claims that BTC could be worth upwards of $20,000 if it can succeed in a role as a primary form of digital gold. Gurbacs explained his prediction, stating:

Investors do refer to Bitcoin as a form of digital gold and gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — Bitcoin has upside. Bitcoin is used as digital gold today. It’s a de-risk asset.

CryptoOracle Executive: Bitcoin Is Functionally Better Than Gold

Postulated price correlation aside, there are many that think that Bitcoin is actually superior to gold, as it has certain functions that make it an appealing investment, while also being functionally better than the yellow metal that humans have come to love over the course of written history.

As reported by Ethereum World News previously, Lou Kerner, co-founder and partner at CryptoOracle, “the first community-first crypto VC,” recently spoke with CNBC to reveal that Bitcoin may actually one-up gold in certain areas. Speaking on CNBC’s “The Coin Rush” segment, which holds a focus on cryptocurrencies and blockchain technologies, Kerner noted:

Gold has emerged as the global store of value and it has held that position for literally a couple thousand years — that’s an awesome run. So we now we have something (Bitcoin) that we think may be functionally much much better. So we expect that over time — not in a day, not in a week, not even in 5 years, — for some of the people using gold as a store of value to switch to Bitcoin.

While the crypto asset proponent didn’t mention any specific drawbacks of gold or positive aspects of Bitcoin, it could be assumed that he sees Bitcoin’s ease-of-use, immutability, digital nature as reasons why some forward-thinkers would see value in the use of BTC.

Image Courtesy of Michael Steinberg @ Pexels

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CryptoOracle Co-Founder: Bitcoin Is Functionally Better Than Gold

“Some Gold Users Will Likely Switch To Bitcoin”

Gold is one of the most valuable metals on Earth, with humans finding value in such an element for thousands of years. Over the course of gold’s history, it became a great way for individuals and groups to store value across a variety of settings, countries, and eras. However, with the advent of the internet and the subsequent introduction of Bitcoin, some proponents of digital technologies believe that gold’s time as the primary global store of value might be up.

Bitcoin has long been likened to gold, with many analysts and industry on-lookers alike drawing connections between the inherent nature of the two assets. Some have even called this emerging asset “digital gold,” due to the similarities it shares with the “original” gold.

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Yet, Lou Kerner, a co-founder and partner at CryptoOracle, has come out to vehemently state that Bitcoin actually may one-up gold in certain areas and qualities, while still complementing gold for its importance to human history. Speaking on CNBC’s crypto-focused “The Coin Rush” segment, Kerner stated:

Gold has emerged as the global store of value and it has held that position for literally a couple thousand years — that’s an awesome run. So we now we have something (Bitcoin) that we think may be functionally much much better (than gold). So we expect that over time — not in a day, not in a week, not even in 5 years, — for some of the people using gold as a store of value to switch to Bitcoin.

This statement highlights two interesting points about Bitcoin’s role as a form of “digital gold.” Firstly, that Bitcoin may be inherently better than gold. While the CryptoOracle executive did not mention any specific values/features, it can be assumed that he sees Bitcoin’s ease-of-use, immutability, digital nature, and more as a reason(s) why some would prefer to use it over gold.

Secondly, the fact that the foremost crypto may begin to eat at the market share that gold has carved out for itself over thousands of years. As reported by Ethereum World News, Gabor Gurbacs, the director of digital asset strategy at VanEck/MVIS, claims that Bitcoin could be worth upwards of $20,000 a piece if the asset can succeed as digital gold. Gurbacs explained his prediction, stating:

Investors do refer to Bitcoin as a form of digital gold and gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — Bitcoin has upside. Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold.

Back to the aforementioned CryptoOracle co-founder, who closed off his segment on CNBC, comparing Bitcoin to the “so-called” junk bond, as both assets were not accepted upon their arrival. In the case of the junk bond(s), it took 40 years to become a normal tradable asset/contract on the market. As Kerner alludes to, for Bitcoin, it might be much of the same, as it may take years to convince those who are hesitant to change that cryptocurrencies (and blockchain) are the next big thing.
Image Courtesy of Michael Steinberg @ Pexels


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Crypto Expert Says Bitcoin Can Rise Over Three-Fold As “Digital Gold”

Gold is one of the most valuable assets in the world, with humans historically holding the rare metal as a valuable asset. But with the rise of the internet and cryptocurrencies, Bitcoin has become a great gold alternative, a “digital gold” if you may, due to its nature as a limited, divisible and store of value centric asset.

Gabor Gurbacs, the digital director assets strategist and director at the VanEck/MVIS firm, recently made an appearance on CNBC’s “Futures Now” segment to talk about Bitcoin’s role as “digital gold.”

Speaking with the “Futures Now” host, Gurbacs stated:

Investors do refer to Bitcoin as a form of digital gold and gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — Bitcoin has upside.

At the time of writing, Bitcoin currently sits at $7350, with a collective market cap of over $126 billion, not discounting the supposed lost Bitcoin that have gone out of the circulation pool. Taking the conservative estimate given by VanEck/MVis’s digital asset director, Bitcoin could see a minimum of a three-fold rise, bringing the cost of Bitcoin to $20,000 yet again and the collective value to ~$350 billion.

Gurbacs went on to explain more about Bitcoin in a “digital gold” role, noting:

Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold.

However, the crypto expert noted that Bitcoin is still not accessible as “digital gold” to many investors, namely institutional investors who are more wary about security and regulation.

He stressed that before becoming world-renowned as a digital gold, Bitcoin, and the rest of the crypto market, will first need to evolve by addressing the issues with liquidity, “marketwide pricing,” and compliance with worldwide governments. He elaborated, stating:

We believe that there is sufficient liquidity. We believe there is pricing benchmarks. We believe there is a way to integrate bitcoin into the financial ecosystem that we are used to for ETFs, stocks, bonds and commodities.

The Current Issues With Liquidity and “Marketwide Pricing”

Cryptocurrency prices and levels of liquidity vary from exchange to exchange, which Gurbacs says throws off some investors due to the large variance from exchange to exchange. He went on to explain that there are currently over 120 exchanges, with the price of Bitcoin changing from platform to platform as aforementioned.

This is much different from the traditional/legacy assets space, where a publicly traded asset holds its values across all trading platforms.

His firm has begun to address the marketwide pricing issue, by providing independent pricing benchmarks through VanEck/MVIS’s product line. Gurbac sees this as one step in enticing more institutional investors to enter into the industry, bringing Bitcoin up to the prices he predicted earlier on the CNBC segment.


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CEO of Xapo Predicted Bitcoin (BTC) Trajectory Years Ago

Bitcoin (BTC)–Wences Casares, Argentinian tech entrepreneur and founder of Xapo, has been a proponent of Bitcoin since nearly the inception of the currency. While he has made bold claims that the innovation of Bitcoin and cryptocurrencies will be bigger than the internet in terms of global impact, his draw to digital currencies has been shaped from his experience living in inflation-heavy countries, such as Argentina. For Casares, Bitcoin not only offers a secure means for digital payment, but an immutable store of value that can cross global borders without the interference of government oversight.

As Bitcoin continues to gain steam again following 2018’s prolonged bear cycle, the inevitable public scrutiny will once again fall on the currency for its utility and use in real-world scenarios. In January, we saw Bitcoin transaction volumes reach a peak that caused widespread network congestion, causing fees to spike and transfer times to crawl to a halt. Some, particularly BTC detractors, saw the failure of Bitcoin to scale as an indictment of the technology. Others simply realized that Bitcoin is still a work in progress. For now, the currency’s role as a digital asset is still valuable, particularly to the billions of unbanked individuals around the globe.

This preference for store of value was captured in the book Digital Gold, as a conversation that took place years ago between Casares and the widely renowned, Oracle of Silicon Valley Reid Hoffman. Hoffman was arguing that few people, especially in the U.S., found fault with the process of using debit or credit cards and would have trouble making the transition to cryptocurrency. Casares countered with an overview of Bitcoin’s trajectory that has proven to be accurate. Author Nathaniel Popper writes,

“Wences agreed with Hoffman that Bitcoin was unlikely to catch on as a payment method anytime soon. But for now, Wences believed that Bitcoin would first gain popularity as a globally available asset, similar to gold. Like gold, which was also not used in everyday transactions, Bitcoin’s value was as a digital asset where people could store wealth.”

As Bitcoin climbs back into the general media’s spotlight, it is worth reviewing some of the repeated, and tired, arguments against the currency.

Bitcoin is a cryptocurrency, it is not all of cryptocurrency. Those outside of the industry of cryptocurrency seem to have a deep misunderstanding of the difference between Bitcoin and cryptocurrency–in all its variations. Yes, Bitcoin can be hailed as the original cryptocurrency (in its modern form), and holds an overwhelming proportion of both market capital and household name appeal. But Bitcoin is not cryptocurrency. The failures of BTC, at least in its present state, from rising costs of mining to the inability to scale the network to useful levels, are not the flaws of the industry. While the world arguably doesn’t need the 1500+ cryptocurrency projects littering the landscape and clogging the perception of the field, it can surely do with a handful that offer unique functionality. There’s no reason why the world cannot entertain a recognizable, flagship cryptocurrency, such as Bitcoin, as a primary digital asset for the store of wealth, while also having other currencies that accomplish global utility like remittance and fee-less payments. Likewise, the rise of Dapps and coin tokens also gives the industry an outlet in decentralized networking features, in addition to the traditional perception of transacting currencies.

Assuming the volatility of cryptocurrency is inherent to the technology. For whatever reason, economists cite the volatility of cryptocurrency at present as being an inherent flaw to the underlying technology and system of operation. Volatility is the result of an emerging market, with a concentration of wealth in a disproportionate userbase, having the expectation that it will function as smoothly as the stock market.

For one, the investment base is much smaller. Adoption in cryptocurrency is minuscule compared to the global market, and holds less of the entrenched practices of the traditional stock market. Two, the capital volume is vastly different. Cryptocurrency, at its peak, commanded a market cap of over 800 billion USD. The present U.S. stock market has a capitalization approaching 30 trillion USD. To compare the two in terms of stability is comparing two different entitiies. Three, it’s clear that investors are uncertain what the worth of cryptocurrency should be–which is plausible given the early state of the industry–and the market reflects that erratic pricing structure. As mentioned earlier, crypto is an emerging market. Currencies don’t have the same layering as investing in stocks or other assets, and instead rely upon the sway of the market to dictate price. Higher volume of adoption in addition to a clearer purpose for cryptocurrency projects–and higher standard for what gets funded–will smooth out the volatility in due time.

It’s a fallacy to label volatility as an intrinsic property of cryptocurrency. The modern conception of banking stretches back more than 5,000 years. The world has only had cryptocurrency for less than a decade. Give it time.


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‘Crypto King’ Still Hails Bitcoin As The Internet’s Currency

Bart Smith, Susquehanna International Group’s go-to guy for digital assets, recently took to CNBC to give his thoughts on why Bitcoin remains to be the most reliable cryptocurrency investment.

On yesterday’s CNBC ‘Fast Money‘ segment, Smith noted that Bitcoin has gained the most real-world adoption, as people are “functionally using” it.

He elaborated on that comment, stating:

If you want to own the asset that you can actually use today and that people are functionally using, it’s bitcoin. The use case for bitcoin is valid today, which is the currency of the internet.

He reiterated that Bitcoin still represents a sort of “digital gold,” allowing for it to be used as an uncensorable, cross-border and efficient value transfer tool. Smith double-downed on that statement, later expressing that Bitcoin has become invaluable as a remittance method, declaring:

They use Western Union, traditional banks; It is slow and it is expensive. And there are people that can stop you from sending that money, whether that’s good or bad. With bitcoin, I can send money. It’s fast. It’s cheap. And frankly, no one can stop me.

While comparing Bitcoin to altcoins, such as ones that propagate smart contracts, the Susquehanna trader pointed out that Bitcoin will have a tough time dropping the aforementioned use cases it currently holds.

If these are the two use cases (it has) today. It’s hard to imagine Bitcoin losing those two use cases versus the field

Melissa Lee, Host of the CNBC segment, then queried the Wall Street trader, asking him if it was actually good that volatility for Bitcoin has subsided, finding “a range that it is trading in.”

Smith referencing back to his “digital gold” statement said that Bitcoin has become the reserve currency of this industry, becoming the backbone of a majority of crypto-to-crypto trades.

Bart Smith: The Altcoin Market Is Inflated

In a later comment, the trader brought credence to the idea that the altcoin market is currently overinflated and grew due to widespread speculation from retail investors. He stated:

People got very excited about bitcoin. They got really excited about all these other tokens and use cases. And all of the sudden you saw all of these smaller tokens, as people got excited about them, massively outperform. We got way ahead of ourselves

Speaking more on the blockchain development aspect of altcoins, Smith made it widespread adoption of advancements like smart contracts and the Lightning Network “aren’t coming anytime soon.” 

This statement was given to reinforce the idea that Bitcoin is one of the only cryptocurrencies with non-speculative value.

Rising Bitcoin Dominance

Smith’s statements, although controversial in some cryptocurrency circles, may actually hold some value.

Over the past week, Bitcoin has begun eating at the market share held by altcoins, outperforming a majority of the top altcoins by over 8%

Image Courtesy Of CoinMarketCap

With Bitcoin’s relative move upwards, the industry has seen Bitcoin’s market dominance figure move from 42% last week, to 43.3% at the time of writing. Although this move may seem minimal, the cryptocurrency market is worth over $250 billion, valuing Bitcoin’s move at a much higher figure than it may first look. 

It is still unclear whether this is a market cycle or that the altcoin market is beginning to deflate. But one thing is for certain, Bitcoin will continue (or at least for the time being) to be a reserve currency in bearish markets.


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Bitcoin is Becoming More Gold Than Gold

Will it Break $10,000 Barrier? YES!

Apparently Black Friday wasn’t at all “black” for Bitcoin as it broke the next major psychological hurdle of $9,000!

Bitcoin surged from $250 just two years ago to over $9,000 today; 1 Bitcoin now is worth a whopping 7 ounces of gold and the industry around it is booming, so the next major hurdle, and arguably the largest psychological barrier of all, is $10,000 which with this pace of development it is quite realistic to expect to be achieved at the end of December.

Analysts such as the mostly optimistically Tom Lee, founder of Fundstrat, recently indicated that his near term price projection is $14,000.

This expected development and rise in the price of Bitcoin and major cryptocurrencies such as Ethereum, is a result of all over growing signs of mainstream adoption, Wall Street Interest, the massive user adoption from hedge funds, futures markets and further increases in the number of users, especially among the millennials. Millennials appear more likely to be inclined to purchase Bitcoin in coming years given rising economic power among them and with that also rising the demand for Bitcoin.

As from some stats Millennials prefer Bitcoin to other traditional financial assets as well; they would choose Bitcoin over government bonds, would choose Bitcoin over real estate, would choose Bitcoin over gold! While only 4% of millennials own Bitcoin today, many say they would prefer to own Bitcoin over stocks, bonds, real estate, or gold so all this will be showed in price rise of Bitcoin in near future.

Gold Fund: Bitcoin Will Make Gold ‘Global Money’ Again

Interesting and ever surprising Bitcoin as explicitly designed to be “digital gold” with all its amazing features will help real gold to reinstate its centuries long property as a “global money”, paving the way for the return of gold as a global currency.

The Old Mutual Gold & Silver Fund with over $220 mln under control has decided it’s high time to diversify into the crypto space’s “digital gold (Bitcoin),” as the fund’s just announced they’ve been conducting a large buy-up of bitcoins for months. The amount of bitcoins the precious metals fund’s bought to date is over $11 million. Ned Naylor-Leyland, manager of the Old Mutual Gold and Silver Fund, said it started buying bitcoin in April.

Naylor-Leyland sees the move as nothing short of a natural fit as a gold fund is investing in “digital gold”, Bitcoin!

“Bitcoin is paving the way for the reintroduction of gold as global money […] Bitcoin was explicitly designed to be digital gold. So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point.”

He said that both bitcoin and gold complemented each other as assets, as the Bitcoin was designed to be “digital gold.”

In his interview with Bloomberg, Naylor-Leyland  conceded that “Bitcoin and blockchain resolve gold’s problems of divisibility, ownership, and speed of transmission”.

Bitcoin as a Store Value

People are not buying Bitcoin because they intend to use it in their daily lives as medium of exchange, they mostly buy it for  most important property of bitcoin which is; to be a censorship resistant STORE OF VALUE that can be held and transferred without reliance on any trusted third party.

Similarly as it happened  during the centuries of history with gold, which ironically has been in 5,000-year long bubble but has proven to be a great, if volatile, STORE OF VALUE. Essentially nobody today uses gold as a medium of exchange. As to whether bitcoin is a better store of value than gold perhaps bitcoin should be considered as digital gold rather than a currency outright.

Not everyone in the wider gold industry is as happy with the status quo and having a competitor such as Bitcoin as “Digital Gold”.

Discussing a drop in profits, BullionVault Research Director Adrian Ash said earlier this month that Bitcoin “noise” was “distracting” some investors and leading to gold being sidelined and redirecting huge amount of cash in buying Bitcoin and other Cryptocurencies with today’s  market cap of more than $270 Billion.


These moves in Bitcoin community comes after the everyday growing number of hedge funds investing in cryptocurrencies and are at an alltime high with the numbers of hedge funds steadily rising as the value of cryptocurrencies is skyrocketing this year.

TOBAM, a France-based asset management company, has introduced a Bitcoin Mutual Fund to offer an alternative investment for institutional investors seeking exposure to Bitcoin. TOBAM’s bitcoin fund precedes the huge move from Chicago Mercantile Exchange’s plans to list Bitcoin futures.

This symbiosis of Both Stores of Value; Gold and Bitcoin are exciting, enthusiastic and optimistic developments in the cryptocurrency community.