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You are here: Home / Archives for Gold

Gold

Bitcoin A Strong Competitor To Gold, Suggests CME Managing Director

February 5, 2021 by Sahana Kiran

Bitcoin has been often compared to gold as the king coin entails several properties that mirror that of gold. The store of value aspect, limited supply of 21 million, and several other characteristics have led to a great majority of people touting Bitcoin as digital gold. While many believe that BTC could flip gold, the entire, gold vs BTC narrative has been on for quite a while. Just as the value of the largest cryptocurrency has been surging, an array of people have been steering towards Bitcoin.

The asset recently got an endorsement from SpaceX CEO Elon Musk. Now, CME Group’s Managing Director and chief economist, Bluford Putnam revealed his take on the king coin.

Bitcoin vs Gold Narrative Prolongs

Gold has been an investor’s favorite for the longest time. Bitcoin seems to be taking over that as millennials and Gen Z has been opting for BTC over gold. Speaking about the same, Putnam told Bloomberg that Bitcoin was emerging as a competitor against gold.

Putnam pointed out that the supply of gold is hazy while Bitcoin’s limited supply of 21 million was quite clear and steady. Albeit this, he urged people to be aware of the volatile nature of crypto. CME’s Chief Economist said,

“When the supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin has illustrated this point.”

He suggested that BTC was on its way to replace gold as a hedge against inflation. While gold has time and stood as a strong hedge during times of unrest in the past. Putnam, however, suggested that the metal may be slipping in terms of its appeal as a hedge, especially against global political risks. He added,

“In the 2017 to 2020 period, the mostly ups and occasional downs of the gold price appear to be directly tied to Fed policy shifts more than anything else. Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s safe-haven appeal.”

Filed Under: News, Bitcoin News Tagged With: Bitcoin (BTC), CME, Gold

GMI Exec Prepares To Sell Entire Gold Holdings To Buy Bitcoin, Ethereum

November 30, 2020 by Reena Shaw

Despite the fact that this year was filled with global uncertainty, Bitcoin has emerged as a clear winner soaring to a high not seen since the bull run of 2017. Bitcoin is all rage once again, thanks to several highly influential investors who bought a huge number of coins.

This time, it is Raoul Pal, the prominent Bitcoin bull and a former Goldman Sachs hedge-fund manager who revealed pouring a huge chunk into crypto.

Bitcoin’s buyer demand has intensified of late. Interestingly, During the same time, the gold market witnessed significantly large outflows propelling several long-term investors to add more capital to Bitcoin and shorting the metal.

Pal said that his liquid net worth is nearly fully invested in crypto. Furthermore, the consistent uptrend of Bitcoin and the struggling case of Gold led him to announce that he was all set to reduce his entire gold holdings for Bitcoin and Ethereum. The exec’s tweet read:

Ok, last bomb – I have a sell order in tomorrow to sell all my gold and to scale in to buy BTC and ETH (80/20). I dont own anything else (except some bond calls and some $'s). 98% of my liquid net worth. See, you can't categorize me except #irresponsiblylong Good night all.

— Raoul Pal (@RaoulGMI) November 30, 2020

A little over a month ago, the Founder of the investment strategy research service Global Macro Investor [GMI] had revealed allocating 50% of his personal investment portfolio in Bitcoin during a recent interview.

He had previously stated that Bitcoin was eating the world and that the cryptocurrency has become a “supermassive black hole” that is sucking in everything around it and destroying it, while further asserting that this narrative was only going to increase over the next 18 months.

Bitcoin Vs Gold

At $18,578, Bitcoin has never been closer to its all-time high. The same cannot be said for Gold. The price of the precious yellow metal is far from its peak. Despite the massive bullish sentiment over Bitcoin, it is important to note that the cryptocurrency is not a replacement for Gold just yet.

As mentioned above, Gold prices taking a hit coincided with surging Bitcoin’s price in the first week of November. If this theory is to be taken into account, it would mean that outflow of capital from Gold and an inflow in Bitcoin was witnessed. The movement of money from Gold to Bitcoin further validate the narrative that the latter is a speculative bet rather than a “safe-haven” asset.

Filed Under: Bitcoin News, News Tagged With: Gold

Gold and Silver Smashing New Records, Will Bitcoin Follow

July 23, 2020 by Richard M Adrian

Discount Brokerage Platform Robinhood has made a spike in the trading activities of gold-tethered traded funds (ETFs). The data from the analytics site, Robintrack, recorded a surge in the number of Robinhood users trading SPDR Gold shares Exchange Traded Funds from 6,000 in 2019 to 26,000 this year. Silver, on the other hand, rose to record highs after moving toward $20.00 per ounce price point.

Gold Trading Performance Surges by 0.40%

Gold approached $1,950 an ounce price support after rising by 0.40 percent and trading an ounce at $1817.50. The weakening of the US dollar as a result of Covid-19 seems to have been Gold’s lifting force. Silver’s price action has taken an overnight surge of 3.0 percent to reach its current price.

Price actions of either metals gave Peter Schiff enough reason to mock bitcoin for its failure to rally strongly against Silver. The epic trader and analyst posted on Twitter that Silver was the “new bitcoin”

It looks like @tudorjoneshedge ended up betting on the slowest horse in the race. In fact, #Bitcoin will not even finish the race. If Paul really wants to bet on a faster horse than #gold he should move his Bitcoin chips over to #silver, or try some gold and silver mining stocks.

— Peter Schiff (@PeterSchiff) July 21, 2020

Schiff claimed silver was rallying high percentages over the count of 10, while bitcoin was hardly up by 2%. At the time of Schiff’s twitter post, Silver hit a 6-year high after rising by 7% to $21.15 per ounce. The leading crypto, on the other hand, stalled around $9,300 after breaking away from the $9,200 resistance on Tuesday. 

Silver is the New Bitcoin For Millennial

It’s not clear whether Silver could take the lead in making investments and become the next bitcoin; but what’s clear is that millions of millennials are hovering around platforms like Robinhood to trade in all things-assets. However, the only limitation that silver faces are that it is less liquid. On average, the supply of silver is lower compared to both Gold and Bitcoin. That’s why most of the silver directional moves post staggering records and are more aggressive. Yet, it seems millennials are more than ready to invest in anything that promises returns.

Nevertheless, Schiff said that the silver was a new kind of bitcoin with direct utility. The trader advised bitcoin enthusiasts to turn to silver and to hesitate to back up the wrong asset.

Filed Under: Industry, Bitcoin News Tagged With: bitcoin and gold, Bitcoin and silver, Bitcoin ETF, Gold, gold and bitcoin, Gold and silver, gold and silver news, silver, silver ETFs

Gold is Showing Resilience in Tough Times

May 19, 2020 by James Newsome

The first financial quarter of 2020 resulted in unusual financial distress in all industries and markets. In most cases, stocks and commodities have experienced significant declines around the board, and world economies are now facing the possibility of months-long recovery. In the midst of this general economic uncertainty, however, gold has displayed relative resilience. True to form as an asset that can often prosper when others fail, it has withstood the worst of the recession and is on the rise overall.

In some level, this can be explained simply by the nature of gold. Nonetheless, there are several specific factors to consider when determining the apparent power of the precious metal.

The Central Banks Buy

As recently reported, central banks are buying gold and helping to raise their prices even during the current economic crisis. Countries like Russia and China are trying to become less dependent on the all-powerful US dollar, and part of their attempt to do so means switching to larger gold stores. Data from the World Gold Council shows that even in the difficult first quarter of the world, central banks have bought some 145.5 tons of gold. This is one reason why gold has maintained some strength, even though the dollar itself has also remained relatively resilient (whereas it tends to move more inversely).

A Recent Dip Proved Insubstantial

Coming out of the first quarter, at the beginning of May, gold dipped marginally, causing some doubt that, after all, its resilience would not be sustained. It rebounded relatively quickly, though, and at the time of this writing, it has been back at its highest level since the last week of April. In addition, this gold chart shows the latest trader sentiment that a relatively large majority of commodity traders—66 percent, for the time being — identify as buyers. It suggests that gold has withstood a shortfall and is likely to stay solid in the early days of the second quarter.

Investors Like Gold’s Potential

With regard to the slight dip at the beginning of May, some were of the opinion that the decision to reopen a few countries may have had an impact. The hope is that, as countries relax their lockdowns, economies can start to operate more normally, and trust in other assets and investments will return at the cost of gold. Nonetheless, some high-profile investors claim that gold has more room to run. These investors — notably the CEO of Strategic Wealth Partners and the founder of Newton Advisors — believe that Gold ‘s status as a “calamity hedge” will last longer.

India Hasn’t Rebounded Yet

The final point is less immediate, but it is still worth taking into consideration when assessing long-term prospects. In the last year or two, the demand for gold in India has been declining in one of the world’s biggest stories. Usually a stable market, India had clearly seen a decline in gold buying interest. Indian demand for gold was set to recover in 2020, however, before the economic crisis hit. It is interesting, then, that the recent strength of gold came in spite of ongoing issues with Indian demand, rather than as a result of a rebound there. It is now less certain whether or not Indian demand will rebound at any point in 2020, but if it does, there will be another boost to gold.

Filed Under: Industry Tagged With: Gold

Bitcoin Price to Hit $75k in Three Years Time; Rich Dad Poor Dad Author Predicts

May 18, 2020 by Arnold Kirimi

Robert Kiyosaki, an entrepreneur and best-selling author of Rich Dad’s book, Poor Dad, on Twitter, said he was optimistic that the Bitcoin price would reach $75,000 in three years. In addition, he shared his concern about the declining economy as a result of the coronavirus pandemic, leading him to buy three valuable assets, including bitcoin, gold and silver.

Through a viral tweet, Kiyosaki reveals that he is working hard on hard assets such as gold and BTC to get ready for a viable economic crash, driven by ill-advised government policies. In addition, through a tweet, he points out how valuable each asset might be in the future. Tweets:

“Bought more gold silver Bitcoin. GOLD [currently] at $1700. Predict $3000 in 1 year. Silver [currently] at $17. Predict $40 in 5 years. Bitcoin [currently] at $9800. Predict $75000 in 3 years.”

Bitcoin price to surge by 97 percent annually

In numbers, his prediction shows an estimated annual increase of almost 76%, 19%, and 97% for gold, silver, and bitcoin, respectively. According to this estimate, Kiyosaki expects Bitcoin to have the most flattering benefit potential of the three properties.

Indeed, this is not the initial time Kiyosaki has shared his bullish BTC sentiments, set forth the virtues of the flagship cryptocurrency, and blockchain technology. The Rich Dad, Poor Dad author has in recent times expressed his confidence in the successful future of blockchain technology on several occasions.

Economies weakening 

In fact, current statistics are a good example of Kiyosaki ‘s latest sentiments about the economy. Retail sales dropped dramatically by 16.4 per cent back in April, while production performance decreased by a low 13.7 per cent.

Meanwhile, the Federal Reserve banks on the United States economy are expected to fall by the end of Q2 this year. According to investment analyst Sebastian Sienkiewicz, the Fed is looking at significant monthly information to predict a 48.07 per cent annual decline in US GDP in Q2.

Filed Under: Bitcoin News Tagged With: Bitcoin (BTC), federal reserve, Gold, Kiyosaki, silver, US

“Digital Gold” Outshines Real Gold as Key Halving Approaches

May 9, 2020 by Arnold Kirimi

Ahead of the key bitcoin halving event, the so-called “Digital Gold” outshines real gold in performance. The popular digital currency has seen huge gains in the last few weeks as the block rewards halving event approaches. Currently the real gold is being restrained by insufficient supply.

Bitcoin is often seen as a digital version of gold because of its scarce supply and its admiration as a store of value. In addition to the main differences, there is another significant distinction between real gold and bitcoin: “digital gold” outshines real gold with the recent BTC price explosion. The price of gold has yet to explode.

“Digital Gold” surges 12% in seven days

As next week’s key bitcoin halving approaches, the price of bitcoin has surged by nearly 12% over the past seven days. BTC price revolved around $10,000 several times over the last two days before dropping to its present price at $9,600.

On the other hand, the price of gold also grew over the week, although not as the so-called “digital gold.” As per the Business Insider, the percentage growth was just a little over 1%, moving from $1,700 to $1,718 per ounce.

Moreover, the sheer distinction is even more crisp when looking back over the past one month. The growth in the price of gold has been gentle but steady. Gold amassed a little over 4% returns over the past one month. On the other hand, bitcoin rallied by a mammoth 34% within the same time-frame.

Both assets were affected by COVID-19 mid-March crash

During the March 12, both the “digital gold” and real gold were affected massively by the coronavirus-driven market collapse. Nevertheless, the price of real gold was not heavily affected compared to the massive dip in BTC price.; which was virtually slashed in half.

Currently, the two prized assets have recovered to their market valuation s before the mid-March crash. However, the elevated swing means that anybody who purchased the asset during the March dip, would have made 100% returns by now.

Filed Under: Bitcoin News Tagged With: Bitcoin (BTC), Bitcoin 2020, Bitcoin halving, digital gold, Gold

Bitcoin May Follow Gold into its Bull Market in Later-Half of 2020: Bloomberg

April 23, 2020 by Utkarsh Gupta

2020 has been an important year for cryptocurrency and, more specifically, for bitcoin.

The largest digital asset performed relatively well after the financial meltdown in March due to the ongoing COVID-19 pandemic. Although countless analysis have been drawn and identified to understand Bitcoin’s short-term market behavior, it is important to note that current statistics may play a key role in shaping the market over the next few months.

Bloomberg’s recent report indicated that Bitcoin has started to mature in the overall financial market and the largest digital asset could possibly transition into a risk-on speculative asset, adhering to the characteristics of Gold. The report stated,

“From a volatility perspective, declines in Bitcoin’s reading and the rise for the stock market’s shifts performance favor toward the crypto asset.”

BTC
Source: Bloomberg

The above chart showed that over a 52-week period, Bitcoin shifted its connection to Gold rather than equities. Admittedly, there is a recent spike in the correlation between stocks and Bitcoin, but according to the chart, Bitcoin and Gold are currently incurring an all-time high correlation index of 0.4924, while BTC and S&P 500 had a market index of 0.2428.

The report also suggested that Bitcoin’s recent consolidation is mirroring its sideways movement back from 2018 and appeared to me approach stability before following gold’s bull market over the coming months.

Volatility favoring Bitcoin over Traditional Stocks

In the past, Bitcoin’s volatility has always been used against its credibility in the market. However, the tables had turned in 2020 as the rise in stock-market volatility vs a decreasing volatile Bitcoin could possibly tilt the market investors in Bitcoin’s favor.

The report suggested,

“Despite Bitcoin annualized volatility that’s averaged about 5x that of the S&P 500 in the past year, the crypto is down only about 5% in 2020 vs. almost 22% for the stock index. For the nascent crypto, it’s also an indication of a transition toward gold-like adoption, maturity and performance.”

Additionally, the report stated that the major benefits of Gold and Bitcoin are that they are on ‘back-end of significant shakeouts’. What is meant is that the traditional asset class is undergoing a mean-reversion process which should allow safe-haven asset such as Gold and Bitcoin to prosper due to reduced correlation with stocks.

Counting the chickens before they hatch?

However, in spite of the positive, it is important to take note that the report did not take into consideration, the immediate event that is approaching Bitcoin. BTC will undergo is halving in 17 days and it will have to facilitate drastic changes to Bitcoin’s fundamentals.

Hence, it was better to hold the brakes on Bitcoin’s reduced volatility bandwagon, which could possibly spike during the month of May.

Bitcoin is entering an interesting period as April proliferated a steady start to Q2 2020.

Filed Under: Bitcoin News, News Tagged With: Bitcoin (BTC), bitcoin price, btc, Gold

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