Illustration - Pando
Magic Money - Gold and bitcoin have become one of the most profitable investment assets in the first half of this year. However, the increase in the value of the two assets that occurred simultaneously brought back debate regarding which investment assets would be a better place to store value. Gold or Bitcoin, who is more profitable?
When viewed from behind, since bitcoin managed to experience a sharp rally in 2017, many investors mentioned that bitcoin has the properties of a yellow metal so that crypto coins with the largest market capitalization value were dubbed as digital versions of gold.
As a result, to date the market often compares gold with bitcoin and analyzes which assets can benefit larger investors.
In terms of supply, actually both of these assets have a limited supply.
The amount of gold available on Earth is limited and the mining rate is relatively stable. The World Gold Council estimates that the supply of gold on land increases by around 1% to 2% per year.
Meanwhile, bitcoin will only have 21 million coins spread throughout the world. Therefore, bitcoin is expected to be last mined at 2140, according to a controlled schedule and inflation value.
In addition, the volatility of the price of bitcoin has limited its use as a store of value. Since its launch, the change in the price of bitcoin has been 5 times more volatile than gold, making it difficult for traders to accept crypto currency as payment.
Meanwhile, the average change in intraday bitcoin prices in the past 2 years exceeded 6%, although volatility has declined.
Gold supporters often say that an asset cannot be a safe store of value when it has seen a decline of more than 80% in just 12 months.
But in fact, real gold is also not completely immune. From September 2011 to December 2015, this yellow metal decreased by 45% against the US dollar.
Therefore, Bloomberg Intelligence Morgan Barna analysts say that instead of positioning gold and bitcoin as opposing assets, it believes that both assets can be used as assets that complement each other's investment portfolio.
"Gold has a better investment nature in some cases compared to bitcoin, but bitcoin is the same with gold," Morgan said in his research publication as quoted by Bloomberg on Thursday (07/04/2019).
Bitcoin is easier to transfer and is more suitable to be used as a currency, but on the other hand the movement of gold is more stable with a proven track record.
Morgan said that there are still many investors who consider bitcoin the best speculative asset at the moment. On the other hand, bitcoin has characteristics that have the potential to provide greater value for investors compared to gold.
Therefore, he said that gold and bitcoin can complement the investor's portfolio to get greater profits.
Meanwhile, based on Bloomberg data, during the current year both assets have been running on a bullish track with bitcoin rising around 206.59% against the US dollar and gold gaining around 10.88%.
Bloomberg Intellogence analyst Mike McGlone said that gold and bitcoin are predicted to continue to strengthen throughout the second half of the year.
"The level of US $ 10,000 per bitcoin has emerged this year so that our predictions of bitcoin will move in the range of US $ 6,500 per bitcoin to US $ 20,000 per bitcoin," Mike said as quoted in his research on Thursday (07/04/2019).
The wide range of price estimates is due to the price movement of bitcoin which is also wide so anything can happen to bitcoin.
He said if bitcoin could break US $ 20,000 per bitcoin this year, it would create a new bullish market for bitcoin. In trading on Thursday (04/07/2019) until 17.20 WIB, the price of bitcoin on the Bitfinex exchange rose 1.44% to US $ 11,557 per bitcoin.
Meanwhile, gold has the potential to continue the rally driven by the possibility of looser monetary policy by the majority of central banks.
Asia Pacific Gold Strategy Expert Robin Tsui said that despite the Fed's potential interest rate cut this month, geopolitical tensions and the prospect of weaker economic growth will overshadow the price of gold for the long term.
"There is a lot of profitable trading momentum for gold at the moment," Robin said quoted from Bloomberg."There is a lot of profitable trading momentum for gold at the moment," Robin said quoted from Bloomberg.
Meanwhile, in trading on Thursday (04/07/2019) until 17.38 WIB, the price of gold in the spot market had fallen 0.21% to US $ 1,415.8 per troy ounce.
PT Monex Investindo Futures analyst Faisyal said that in the current trade the closest resistance level of gold was at US $ 1,420 per troy ounce, so if it penetrated upwards from that level it could potentially trigger further price increases towards US $ 1,425 per troy ounce before targeting the resistance area strong at US $ 1,432 per troy ounce.
"Conversely, if it moves down, the support level is seen at US $ 1,412 per troy ounce and breaks below that level will trigger a further decline towards US $ 1,407 per troy ounce before targeting the key support area at US $ 1,400 per troy ounce," Faisyal said. from his research publication on Thursday (07/04/2019).