Will bitcoin be the safe haven of the 21st century?
Audio 03:47
Bitcoin is highly regarded by anyone who has a problem with the US dollar.
AFP / File
By: Dominique Baillard Follow
8 min
Bitcoin is returning to its peaks, approaching the $ 20,000 mark.
Will it dethrone gold by becoming the safe haven of the digital age?
This is the conviction of its supporters and a growing number of investors.
Publicity
This year again the variations of bitcoin panic traders.
At the start of the coronavirus crisis, it tumbles, its panicked holders sell to buy dollars, on March 30 the crypto currency loses 40% of its value, it drops below the $ 6,000 mark.
Eight months later, he is on the verge of breaking the ceiling of $ 20,000, a new high in sight that feeds the novel of this cryptocurrency born almost twelve years ago.
By regaining momentum as the pandemic has worsened, bitcoin is seeing its legitimacy strengthened and traditional investors, those who manage funds in the world's largest markets, are beating their ass.
One admits that he was wrong to ignore this strange currency, another that it is here to stay.
Does bitcoin really have the same virtues as gold?
Its inventor purposely limited the number of units to 21 million, and there are today 18 million in circulation, so its value can only climb once all the digital deposits are exhausted.
Like gold, bitcoin cultivates scarcity, and therefore high cost.
At a time when debt explodes, investors fear inflation.
Rather than buying gold to hedge against this risk, they could go for bitcoin.
This is the choice made this year by millennials.
Since Paypal allows payments in bitcoin, since there are financial vehicles that allow easy investment in crypto currency, bitcoin is attracting more and more, hence the uptrend in recent months.
But bitcoin is still a long way from replacing ingots deposited in central banks to guarantee the value of currencies since in value, this market only weighs 3% of the gold market.
Some central banks have already adopted it, this is the case in Iran
Bitcoin is highly regarded by anyone who has a problem with the greenback or with Uncle Sam. Argentines, for example, are big buyers of bitcoin because their dollar investments are limited to prevent capital flight.
In Venezuela, as in Iran, it is to circumvent American sanctions that bitcoin is popular with the authorities, and with residents because its value is safer and higher than that of their national currency.
China is also a big bitcoin-loving country, but given the small size of this market, it is materially impossible to exchange all treasury bills held by the Chinese central bank for units of bitcoin.
Moreover, given the high volatility of this young currency, it would be taking an ill-considered risk.
Because bitcoin has still not proven that it is as safe as gold, the unalterable metal that is passed down from generation to generation.
For its detractors, bitcoin has not convinced as a currency, too complicated, too expensive to use on a daily basis, its use is reserved for those who brandish it to stand out as we would with a watch or a luxury item of clothing.
As an investment, bitcoin on the other hand is currently finding its place but beware of the financial bubble warn these Cassandras: its value could collapse like that of works of art or vintage sneakers that are sold today ... at gold price.
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