Data: Bitcoin has outperformed gold for 10 consecutive years, what about 2020?

Bitcoin, sometimes referred to as “digital gold,” has outperformed the precious metal every year since 2011, according to OnChain Capital founder Ran NeuNer.

Since 2017, as Bitcoin has soared from less than $4,000 to as high as $20,000, an ounce of gold has long been worth less than 1 BTC.

Since the beginning of 2019, the price of Bitcoin against the US dollar has more than tripled. | Source: coinmarketcap.com

Year-to-date, Bitcoin’s price against the U.S. dollar has more than tripled, while gold’s price has risen more than 18% from $1,282 to $1,514.

Bitcoin can attract qualified investors

Given the huge difference in market capitalization between Bitcoin and gold, Bitcoin has greater potential to grow in value in the short to medium term than gold.

Recent estimates put gold’s market cap at around $7.3 trillion, while Bitcoin’s market cap hovers around $166 billion.

However, Bitcoin is highly liquid across global cryptocurrency exchanges and over-the-counter (OTC) markets, and open interest on widely used margin trading platforms such as BitMEX is approaching $1 billion.

Bitcoin has been outperforming gold and will stabilize over the longer term as a traditional safe-haven asset alongside bonds, likely due to a growing number of investors recognizing Bitcoin’s potential to evolve into a major alternative store of value.

However, contrary to popular belief, Bitcoin has failed to demonstrate the characteristics of a safe haven asset so far in 2019. It has not shown an inverse relationship with global stock markets, nor has it followed the price trends of gold and bonds.

Nevertheless, with financial institutions such as Bakkt and Fidelity demonstrating clear recognition of Bitcoin, as well as significant support from institutional investor infrastructure, Bitcoin has begun to become more attractive to a wider investor base.

Gold’s bullish catalyst could be a negative factor for cryptocurrencies

During times of uncertainty and uncertainty in the global economy, investors tend to stay away from the stock market and re-enter the safe haven markets.

Thus, in December 2018, when fears of a recession and a stock market correction were at their peak, volatility and the sell-off in “risky” assets intensified.

Late last year, some theorized that Bitcoin may have been affected by a worsening macro trend, triggering a nearly 50% price correction to the low $4,000s.

However, in the coming months, as the mood in U.S.-China trade talks heats up and the jobs report is positive, strategists expect U.S. stocks to perform strongly, advising investors to rotate from traditional safe havens to high-yield bonds and stocks.

Gold is expected to remain stable as many investors remain cautious about various geopolitical risks. It remains to be seen whether this environment will allow Bitcoin to continue to outperform gold in 2020.