In order to answer this question, we need to analyse several factors to be taken into account, before setting out a theory or even better a prediction. These two investment options are the top profitability in 2020. They seem to have benefited from the crisis caused by the Coronavirus Covid19, unlike the other options of the financial markets, such as oil, which has declined significantly, due to the decline in consumption worldwide (certainly due to economic and productive paralysis).
In the case of gold, it has overcome the barrier of 2,000 dollars per ounce, levels never reached, not even in the previous financial crisis of 2008. In the course of 2020, gold has accumulated a positive return of more than 25%. Traditionally, precious metals have served as a refuge value for many analysts and investors.
If we consider the price of Bitcoin, which like gold, was favored by the pandemic: the demand for this virtual currency has increased significantly, regaining the level of 12,000 euros that it had lost more than a year ago.
The annual yield of this currency in 2020 currently stands at 23%. While confirming its typical greater fickleness, and considerable variability in value. The fluctuations with respect to gold are and will certainly be of much wider range.
So, taking into account the fact that the cumulative returns of investment alternatives to equity markets are very similar, which one should we maintain?
This will depend on the investor’s appetite and economic expectations and, above all, on his willingness and/or ability to take risks.
On the one hand, gold has always been favoured by times of economic crisis, which led to a decline in the stock market due to lower corporate profits. Investors move their portfolios from risky variable income assets to those markets, such as the precious metal market, where they invest their savings to obtain a return and avoid depreciation or even loss of their capital.
In my opinion: the economic crisis caused by the Coronavirus will continue over time, gold will continue to grow and demand for this asset will not stop.
If, on the contrary, the exit from the economic crisis will happen quickly, the value of gold will decrease in the same proportion as the increase it had in the wake of the pandemic, i.e. it will be very unlikely for investors who got the precious metal in time to lose compared to pre-Covid prices.
If we analyze Bitcoin expectations, we have to evaluate different elements/factors. On the one hand, whether or not there are public bodies, both central banks and governments, that limit its use to make payments worldwide: which would certainly negatively affect its price/value.
Another factor could be the rise in the liking of investors of other competing crypto-coins, which could cast a shadow over the BTC.
Some time ago it was said that Facebook would issue its own virtual currency called “Libra”, but for the moment this project has turned out to be a resounding failure (probably the markets don’t like Mark Zuckerberg is Donald Trump swore to put an end to big tech).
So as long as Bitcoin is the only protagonist, it will continue to grow and the transition to a competitor cannot be too fast, it will probably take years.
And finally, the growing demand for cryptomoney, which is manifesting itself during 2020, while this trend continues, its price will continue to rise for the rest of the year, and probably for the whole of next year until it settles on a higher share of € 15000, provided that the € does not implode before 2021 due to the economic crisis in the EU which could certainly lead to the major German banks going bankrupt. Deutsche Bank and Commerzbank are at the moment technically already bankrupt (we have known this for years because of the toxic securities they hold) and are kept alive only by the German government and the EU according to the principle: Too big to fail, if they survived 2008. .. the shock looming this time will not let them escape.
we can therefore parameterize today’s €15000 to about $18000 in the future . The US dollar with the re-election of Donald Trump certainly does not run risks like the € and the European economy, and North American voters are not so idiotic as not to vote for it, (as the left-wing Europeans think).
We must remember that since the previous crisis in 2008 the price of gold has risen by more than 100%, since its price was around USD 950. Bticoin did not exist at that time, as it was launched in 2009, and the rise since then has been spectacular.
At first its price was around $0.01, and today it is traded close to 12,000 USD.
The numbers speak for themselves… the chatter is superfluous. And I agree. …“if they are roses they will bloom” …
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