BTC is a digital asset with more spark than any other commodity in the market. Even conventional traders and individuals with no financial history have stepped to take a look at this marvel of technology. Since its launch, the flagship cryptocurrency has been appreciated around 1000% of its original market price. Such a hectic growth spurt is phenomenal and an indicator of the potential of digital securities and assets in the future.
As per the data provided by coinmarketcap.com, it can be deduced that the average daily trade volume of Bitcoin is $70.10 billion. This number accounts for the BTC transactions made between Jan 2021 to March 2021 only. On the other hand, the average daily trade volume of gold is $178.97 billion in 2021. This trading transaction data is provided by Gold.org, and it accounts for all gold trades made in exchange platforms, OTC, and ETFs, etc. Bitcoin YTD average makes up for 40% of Gold YTD average.
Traders Prefer BTC as a Better Investment Opportunity
The aftereffects of the pandemic have hit many economies with damages. The American economy that had barely recovered from older shocks also took a massive jab. Since USD has acquired a position of international trade currency, its devaluation has far-reaching effects on the global scale. According to careful estimates, the value of the dollar has depreciated by 85% during the last 50 years. This depreciation may be fueled by a recent stimulus package that would prompt the central bank to print more money.
The share market took its cues directly from fiat money and had also seen a decline during the recent pandemic. It should be noted that many financial analysts consider Bitcoin as a hedge that eliminates the risk of inflation and devaluation of the currency. In comparison to Gold’s $10.99 trillion, the total market cap of BTC is valued at $1.04 trillion. BTC market cap makes for only 9.46% of the Gold. Based on the 40% daily average trade volume of Bitcoin, traders’ preference in BTC investment becomes clear.
Is Gold Going to be left behind BTC in the Trading World?
Bitcoin has already started to eat into the precious metal’s market share. The recent meteoric boom of Bitcoin is caused by investment interests of names like Tesla, MicroStrategy, GrayScale, MasterCard, and PayPal, etc. The recurrence of the pandemic this year has shown the possibility of major changes taking place in business practices globally. Therefore, investors can make the necessary adjustments in their investment strategies for the future as well. The qualifying factor for Bitcoin as a preferred option of Investment is that just like gold, it cannot be diluted or debased in the fashion of fiat currencies. Thus far, Gold and Bitcoin have shown greater resilience than any other type of security or stocks. Fiat currencies might show a more volatile reaction to the pandemic than expected. Therefore, it is interesting to see how Bitcoin and Gold end up performing when pitied against each other. Gold Prices are expected to quadruple in the upcoming years; meanwhile, Bitcoin is thought to reach a six-figure valuation this year.