Supporters of the largest cryptocurrency by market capitalization, Bitcoin, continues to claim that this cryptocurrency will replace gold as a store of value and hedge against inflation. In 2022, however, BTC and the altcoin market have fared significantly worse than gold.
So far this year, gold is doing better than BTC
Data from the tool Finbold BTC ROIwhich allows users to compare the return on investment (% ROI) of BTC against traditional assets such as stocks, currency, index and metal, shows that compared to gold, BTC’s year-to-date returns are 40.41 lower than the precious metal’s %.
Other precious metals, including silver and platinum, have outperformed BTC by З5.24% and З9.49%, respectively, since the beginning of 2022.
At the beginning of 2022, the primary cryptocurrency was valued at $46,700 and is currently trading at $20,600. The aforementioned slump this year affected the entire krуpto market, which lost more than 2 trillion USD in market capitalization. The loss also marked BTC’s worst quarter in more than a decade, as its value fell by more than 56% in the second quarter of 2022.
It is interesting that BTC and gold were in the same highly inflationary environment with the threat of a possible increase in interest rates from the Federal Reserve System. Gold’s performance in the current environment may be due to confidence in the metal that has been building for decades. BTC is a young asset class that obviously still has a long way to go before wider adoption.
The lack of a long history thus undermines BTC’s ability to stand out as an effective hedge against inflation. However, despite its negative returns in 2022, cryptocurrency advocates believe it will outperform gold in the next few years. For example, Ronald-Peter Stoferle, managing partner of the investment company Incrementum AG, believes that BTC will eclipse gold despite the ongoing bear market. In his opinion, in the long term, BTC will become a less risky asset and establish itself as a store of value.
Switzerland’s Crypto Valley
