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Bitcoin is Offensive, Gold is Defensive
Gold and Bitcoin work most effectively when they're in the same portfolio, a Bitwise executive has argued.
Speaking at the Digital Assets Forum in London, Bradley Duke, Managing Director and Head of Europe at the digital asset management firm, said that gold "is a better cushion" when markets are falling, while BTC offers greater upside during rebounds.
"One is more to the upside risk and the other is more protecting against the downside of uncertainty," Duke said.
The Bitwise exec discussed whether crypto's four-year cycles are dead. This discussion was held when Bitcoin experienced a significant drop.
The analogy of Bitcoin as "digital gold" has faltered recently, with both assets on different paths. While gold has surged by 46% over the past six months, reaching a new all-time high, Bitcoin has decreased by 40% over the same period.
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When asked why gold had proven more popular than Bitcoin recently, Duke pointed to "muscle memory," with investors moving towards a traditional safe haven asset like gold that has existed for thousands of years.
"Allocators and countries have bought gold in this way for hundreds of years and will continue until trust is established in this new form of money, which is Bitcoin," he added. "But that takes time."
Bitcoin’s “four-year cycle” has been a point of discussion. Many analysts had believed that BTC operated in four-year cycles of boom and bust due to "halvings" which reduce the supply of new Bitcoin. However, the significance of these halvings has diminished as most Bitcoin is already in circulation, and exchange-traded funds have moderated this digital asset's volatility.
Anatoly Crachilov, CEO of Nickel Digital, noted that new BTC supply has been "dwarfed by ETF flows, basis trades, and treasury acquisitions."
Bitcoin's Global Status
Duke argued that Bitcoin was "growing up," evolving into a significant macro asset. Initially, the primary investors were "cypherpunks and what we now call OGs." Today, even sovereign states are investing in Bitcoin.
The managing partner of Fifth Era Blockchain Coinvestors, Matthew Le Merle, acknowledged Bitcoin's recent contraction as "very challenging," especially for those who bought at higher prices.
He emphasized that the focus should be on turning Bitcoin into "a global peer-to-peer cash" at a time when there are limited numbers of top-tier blockchain developers, many of whom may be attracted to other industries like artificial intelligence.
"If you're investing because you think you can time the market to trade and make quick profits, you're in the wrong room," he warned. "That's not what this is about."
This article has been published in decrypt.co via Yahoo News.
'Bitcoin is Offensive, Gold is Defensive': Bitwise
Bitwise’s Head of Europe argues that gold offers a cushion when markets fall, while Bitcoin boosts portfolios during rebounds.
finance.yahoo.com
