As the Sino-Us trade war raged, it has become increasingly obvious that more investors are moving their assets into Bitcoin instead of gold, the traditional preference for most investors in the past.
This was made public by Business Insider after the trading platform eToro released a statement that it has seen more bitcoin trading positions opened in as the peak of the dispute between the two countries.
The records show that between May 19 and August 19, the number of trades showing interest in Bitcoin surged to 282 percent at a time the investors’ interest in gold spiked by just 73 percent. This trend was not noticeable last year when the trade war had not escalated to this point.
This is a testimony to the fact that many investors are beginning to consider Bitcoin a more viable value storage instrument than they previously thought.
Simon Peters who is an analyst at eToro confirmed this when he said that
“The correlation with gold on eToro’s platform could be a sign that the overall perception of bitcoin is gradually shifting from speculative towards a lower-risk store of value.”
It is obvious that the demand in Bitcoin especially surged as the trade war tended to escalate with more investors opening positions with the exchange.
For instance, when China announced that it would increase tariffs on $60 billion worth of goods coming in from the United States, Bitcoin positions increased by 139 percent while gold has an increase of just 108 percent.
On June 25 after the US announced delay of tariff on some Chinese goods, the positions taken up for Bitcoin in exchanges soared by 40 percent while gold rose by 26 percent. Bitcoin positions have consistently been higher than those taken for gold.
Bitcoin Better Than Gold
Cole Walton of Plouton Group, a bitcoin mining firm said that for the investors to appreciate the value of Bitcoin as an important storage instrument that is even better than gold, it is important for them to be aware of its scarcity. He added that Bitcoin has a better advantage in use as a storage instrument than gold because of its ease of transfer.
“Gold is physically scarce and has very favorable stock to flow characteristics because it is difficult and costly to mine. Bitcoin has even more favorable stock to flow characteristics because it is governed by immutable computer code, where the mining reward decreases every four years.”
It is left to be see how well these characteristics would impact the future of Bitcoin.