Bitcoin as an alternative: Safe haven: Ethereum founder Vitalik Buterin is not a fan of gold | news

• Bitcoin is becoming more and more popular as a safe haven
• The correlation between bitcoin and gold is increasing
• Vitalik Buterin believes gold is “incredibly impractical”

Crypto fans are now used to the fact that there can be large fluctuations in the crypto market. Nevertheless, crypto veteran Bitcoin has seen an impressive rise in value since its creation more than a decade ago. Although some investors doubt that Bitcoin will ever succeed in establishing itself as a real payment alternative, the cyber currency has now built a reputation in the market as digital gold. The digital currency benefits from the fact that the amount of bitcoins that can be mined is limited to 21 million coins.

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Rising correlation between bitcoin and gold

The latest data from Bloomberg’s news portal also shows that the idea that the cryptocurrency, like the precious metal, could be used as a store of value, for example in times of crisis or inflation, is not entirely unreasonable. Bloomberg recently reported that the 40-day correlation between Bitcoin and the Philadelphia Gold and Silver Index (XAU) reached 0.5. In August this was still zero. Bank of America experts Alkesh Shah and Andrew Moss take this as a sign that bitcoin is increasingly sought after as a safe haven: “A declining positive correlation with the SPX/QQQ and a rapidly increasing correlation with the XAU suggests that investors Bitcoin can be seen as a relatively safe haven as macro uncertainty lingers and the market bottom is yet to be seen,” Bloomberg quoted the two strategists as saying.

Why choose bitcoin over gold?

The question now remains which of the two stores value investors should choose when looking for a safe haven. This issue was recently discussed on the SMS service Twitter. Twitter user Zach Weinersmith asked why investors who didn’t want to use centralized authorities for money wouldn’t just go for gold, prompting none other than Ethereum founder Vitalik Buterin to advocate cryptocurrencies as a store of value.

That’s how the crypto mastermind argues that gold is “incredibly impractical.” It is difficult to use, especially when dealing with other parties that are not trustworthy. In addition, it is difficult to keep gold safe. There would be no multisig procedure as is the case with cryptocurrencies. Multisig wallets are digital wallets that require at least two private keys to authorize a transaction. Also, gold would have even lower adoption than cryptocurrencies at this point, which is why digital currencies are ultimately the better choice, according to Buterin.

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