Bitcoin has smashed the all-time high price peg this week and is now contemplating to uphold its price beyond the $18,500 level. With the asset posting notable gains over the past month, specialists are now considering it seriously and could see it become the worldwide reserve currency – replacing gold.
Gold’s Days Are Possibly Numbered
Earlier this week, finance news source Bloomberg reported that numerous Wall Street corners have been arguing Bitcoin’s chance of replacing gold as the global reserve asset.
The news source disclosed that many investors question Bitcoin’s viability, especially considering that it remains volatile. Investors could also begin moving portions of their wealth into the asset, marking the beginning of a diversification push.
Jean-Marc Bonnefous, a crypto investor with Wall Street experience, told Bloomberg that gold had its glory days decades back. However, the times are changing, and several investors understand this.
Bloomberg also noted that several traditional finance stalwarts had shown a penchant for Bitcoin. The crypto industry already got the cosign of notable billionaire investors like Stanley Druckenmiller and Paul Tudor Jones.
Considering a Bitcoin move, the latest institution is Guggenheim Partners LLC, an investment and advisory firm with over $250 billion in assets under management.
As Bloomberg reported on Sunday, the firm reserved the right to invest portions of its Macro Opportunities Fund – a $5.3 billion war chest focusing on a fixed income and equity securities – in Grayscale’s Bitcoin Investment Trust.
Bloomberg didn’t report on how much the firm plans to invest, although there is every possibility that it could pay over $500 million.
Time Has Begun
Citing data from JPMorgan, family fund offices are also selling units of their gold exchange-traded funds for Bitcoin. The investment giant reportedly pointed out that gold-backed funds have dropped 93 tons since November 6. On the other hand, Grayscale’s Bitcoin trust has doubled in dollar terms since August.
James Butterfill, an investment strategist at CoinShares, told the news source:
“Bitcoin is establishing itself as a credible store of value. This is particularly appealing during this time of unprecedented loose monetary policy. For these reasons, investors are naturally comparing it to gold.”
While Wall Street seems to be going to the party, many in the Bitcoin space have been talking up the asset’s potential of seizing gold for a long time. Among the current rally, they have increased their opinions.
Earlier this week, Cameron and Tyler Winklevoss, the Gemini Foundation’s co-founders, told CNBC that Bitcoin’s rally could set the foundation for an eventual $500,000 price holder.
The twins revealed that while the new all-time high is an admirable feat, the leading cryptocurrency sees an influx of investors, many of whom want to hedge against inflation.
This influx could set the pace for an asymmetric return in the range of 25 to 40x. If that happens, Bitcoin could hit $500,000 and manage a higher market cap than gold.
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