Bitcoin could outperform gold as global markets remain turbulent

Posted: 18 March 2022 1:12 am
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Experts see Bitcoin outperforming gold, stocks and commodities in the near- to mid-term, especially as inflation and war-related fears mount.

  • Former BitMEX CEO Arthur Hayes believes economic sanctions against Russia will have a major effect on the global economy over the coming few months.
  • Since 2000, the purchasing power of the US Dollar has declined by over 60%.
  • In a fresh new circular, the Reserve Bank of India has once again requested the government to ban Bitcoin and other “private cryptocurrencies.”

The last 48 hours have seen Bitcoin (BTC) float above the all-important $40,000 psychological threshold, taking the digital asset’s weekly gains to around 3%. At press time, BTC is trading at $41,779.

In terms of where Bitcoin may be headed, Bloomberg Intelligence’s senior commodity strategist believes that growing inflation — which currently stands at a near 50-year high — will allow the digital currency to continue maturing as an asset class. He went as far as saying that it could eventually beat gold in terms of annualized returns. He added:

“2022 may be primed for risk-asset reversion and mark another milestone in Bitcoin’s maturation. Unlikely for Bitcoin to stop outperforming gold, stock market amid bumps in the road as the Fed attempts another rate-hike cycle.”

Arthur Hayers is the former CEO of BitMEX who recently pleaded guilty to violating the US Bank Secrecy Act (BSA) in federal court for allowing the trading platform to operate with poor anti-money laundering (AML) protocols. Hayes believes that the coming few months could see global financial markets in turmoil, especially as the Ukraine-Russia war continues to add to the existing inflationary pressure.

He further highlighted that the freezing of the Russian Central Bank’s assets has been quite symbolic of what lies ahead. He added that removing the “world’s largest energy producer” from the global economic stage could create some “unimagined and unintended consequences.” When asked about Bitcoin, Hayes said:

“If you aren’t willing to babysit your Bitcoin, then close your eyes, press that buy button. For a single Bitcoin, my unit is in the millions. For an ounce of gold, my unit is in the thousands.”

Finally, he noted that the coming months may see BTC and gold become increasingly bigger stores of value, especially as the US dollar and Euro depreciate in value. To put things into perspective, since 2000, the purchasing power of USD has depreciated by a whopping 68%.

How to buy Bitcoin

Reserve Bank of India wants to ban Bitcoin and other cryptos again

The Reserve Bank of India (RBI), the SE Asian country’s central banking institution, recently published a circular taking aim at the digital asset industry again. In its report, researchers noted that while distributed ledger technology (DLT) associated with crypto is quite useful, Bitcoin and other “private currencies” stand to induce a high degree of instability within the Indian economic landscape. The report further read:

“Historically, private currencies have resulted in instability and, therefore, have evolved into fiat currencies over centuries. The retrograde step back to private currencies cannot be taken simply because technology allows it without considering the dislocation it causes to society’s legal, social and economic fabric.”

As part of India’s annual budget presentation earlier this year, the country’s finance minister Nirmala Sitharaman stated that instead of banning cryptocurrencies, her team would be levying a flat 30% tax on profits realized via the trade of digital currencies.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.


Disclosure: The author owns a range of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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