Given the uncertainty about prices, some investors are starting to consider Bitcoin as digital gold and a reserve of value.
The institutional adoption of Bitcoin is increasing, thanks mainly to the launch of the new Bitcoin ETF spot.
If current trade tensions are intensifying, Bitcoin could challenge the US dollar as a global reserve currency.
Cryptography prices collapsed as President Donald Trump’s trade war has developed. Overall, the prices of cryptography are down for the year, and many show little sign of recovery anytime soon.
In a context of increasing rates, investors pass risky assets to less risky assets, which makes any cryptocurrency an easy to pass from a portfolio. But there is a cryptocurrency that could still win, and it is Bitcoin(Crypto: BTC).
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In the last 30 days, Bitcoin is up 14%, mainly due to the rebirth of the digital gold investment thesis. In the eyes of many investors, Bitcoin begins to behave like physical gold, which makes it extremely precious. In times of economic and geopolitical uncertainty, Bitcoin could be a potential value store.
Although there is still skepticism about this digital gold thesis, there are also an increasing number of evidence suggesting that Bitcoin is even better than gold during moments of economic and geopolitical peak.
Last September, Blackrock Published a 10-page report, entitled “Bitcoin as a single diversifier”, which examined six different external shocks to the world economy which occurred between 2020 and 2024, including the COVVI-19 pandemic and the invasion of Ukraine by Russia.
In five of the six cases, Bitcoin has performed better than long -term gold. And in half of the cases, bitcoin worked better than gold both short -term and long -term. It therefore gives me a lot of confidence that Bitcoin can always be a winner, even if the trade war degenerates more. While investors have controlled with the consequences of prices, they are likely to turn to bitcoin as a reserve of value. This could explain why Bitcoin has started to rally in the last 30 days.
The second major factor is an increase in the institutional adoption of Bitcoin in the last 18 months, thanks mainly to the launch of Bitcoin (ETF) negotiated funds Last year. They have now transported more than $ 100 billion in investors looking for an easy way to obtain an exposure to Bitcoin.
We can say that these FNB Bitcoin, which began to exchange in January 2024, have been the launch of new most successful products since Wall Street for decades. And they attract all kinds of investors. The first funds were first the hedge funds. Then came the big investment banks of Wall Street. And then came the first wave of major institutional investors, such as pension funds. The next step could be great sovereign funds.
At the same time, another form of institutional adoption comes from the American government. Trump campaigned on a Pro-Crypto platform, and has already taken several measures to advance the adoption of bitcoin in the United States movement, the centerpiece of the centerpiece was the creation of the Bitcoin Strategic Reserve in March, which officially designates Bitcoin as a national strategic asset.
Current uncertainty concerning prices has many intelligent people at Wall Street to talk about the potential disappearance of the US dollar as a reserve currency of the world. The dollar is now negotiated at three years, American shares are declining and long -term treasure yields are increasing. Combined, it is starting to paint an image that investors remove assets denominated in dollars.
Image source: Getty Images.
The term fantasy for this is “denollarization” and refers to a world in which the US dollar finally loses its status of reserve currency. In this spirit, a currency that we are now talking about in potential replacement of the US dollar is Bitcoin. It is global, it is not sovereign, and it is not linked to the specific economic fortune of any country.
Admittedly, this scenario is probably far, but it alludes to the long -term power of bitcoin and its growing importance for the global financial system. It also suggests that, even in the worst collapse of the world economy, Bitcoin could always be a winner.
As Blackrock pointed out last year in his report, Bitcoin has a very unique risk award profile. In some respects, it acts as a “risk”. And in other respects, it acts as a “risk” asset.
Currently, given all economic uncertainty, I focus less on the properties of the “risk” of Bitcoin, and more focused on its “risk” properties. The trade war may have crushed the crypto, but it will not be able to crush bitcoin.
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