Is Bitcoin a Better Long-Term Investment Than Gold ?

In the first quarter of 2023, Bitcoin recorded an outstanding performance with a growth of 73%.

To explain the reason for the growth of Bitcoin it is important to refer to its genesis and the historical period in which we live. The subprime mortgage crisis was wreaking havoc on the US economy in early 2009, with many banks doomed to fail.

Bitcoin was specially designed to counter the influence of traditional currencies, which are controlled by central banks. With this virtual currency we can finally break the hegemony of these currencies.

In 2023 we are faced with a situation very similar to the 2007-2008 crisis, with banks in trouble and central banks rushing to print money to bail them out.

We have already addressed this topic in previous articles: printing money is a recipe for disaster, as it increases both private and public debt. It has become increasingly clear that government bonds and deposits, especially in local banks, are not safe enough. The recent case of Credit Suisse, where the Bonds were completely cancelled, is a very worrying example.

The current tensions are leading to an increase in demand for Bitcoin, which is currently behaving as the quintessential safe haven asset: gold.

In my previous piece, I expressed my view on the impending market crash and stressed the importance of having safe-haven assets in your portfolio, if and when that happens.

Over the last 3 months of 2023, Bitcoin has proven to be a resilient currency, gaining ground in weeks of both ups and downs. As regulation evolves, the outlook for Bitcoin is getting better and better.

China had banned the purchase of cryptocurrencies, but soon realized the seriousness of the mistake. The Chinese have found a way to buy and sell cryptocurrencies on foreign brokers despite the national ban.

From the recent updates on TikTok, we can see that Bitcoin has started to be a little more accepted. For the first time the Bitcoin price update appeared on the platform, symbolically representing a higher consideration towards it.

Investor sentiment today is highlighted by record numbers of tweets referring to Bitcoin – a clear sign that investor interest is growing rapidly. The social network gives everyone a deeper understanding of which assets will become more popular in the near future.

There are also positive signals from a political point of view from America, with Robert F. Kennedy Jr. publicly expressing his opinion on his Twitter account and arguing that cryptocurrencies such as Bitcoin offer a way out from the effects of the Fed’s monetary policy.

Since the first financial crises, central banks seem eager to print more money which could lead to significant currency devaluation. This is something of great concern for the markets. 

When monetary values ​​start to fall, gold is overtaken by Bitcoin. This is due to the limited supply which gives this cryptocurrency an advantage over other investments.

Bitcoin has a maximum amount of 21 million BTC that can be 'mined'. Case studies have shown us that investing in Bitcoin can bring big returns after a massive cash injection, such as in 2020 during the pandemic. In that precise period, Bitcoin clearly surpassed gold as a safe currency.

The social network gives everyone a deeper understanding of which assets will become more popular in the near future. There are also positive signals from a political point of view from America, with Robert F. Kennedy Jr. publicly expressing his opinion on his Twitter account and arguing that cryptocurrencies such as Bitcoin offer a way out from the effects of the Fed’s monetary policy.

Since the first financial crises, central banks seem eager to print more money which could lead to significant currency devaluation. This is something of great concern for the markets.

This year, amid worries of a banking crisis, Bitcoin has gained over 80%, while bullion only +11%.

BTC Daily Chart

The technical situation is also very good, with prices well above the 3-month average. Volumes are also supported by a fast exponential moving average signaling a decidedly strong trend.

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Disclosure: I opened positions related to Bitcoin in March and I am ready to buy more Bitcoin and related stocks, such as RIOT PLATFORMS, INC. (RIOT). The contents and information presented on this site should not be considered as a solicitation to invest in the financial markets. It is simply a matter of personal opinions and operations.