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29.10.2020

Due to the crisis in 2020, many entrepreneurs have reconsidered their attitude to digital assets. Some argue that bitcoin eventually becomes a reliable defensive asset, while others emphasize the excessive volatility of digital gold. This article collects expert opinions on the advantages of digital gold over the dollar, stocks and gold.

The first cryptocurrency against the US dollar

Bitcoin is very often opposed to the dollar this year. One of the reasons is the limited emission of a digital asset, which the US currency does not have. The American authorities have developed a numerical mitigation policy, the main goal of which is to combat the negative consequences in the economy in connection with the COVID-19 pandemic. As a result, the number of bills increases and the currency depreciates.

Strategic Development Director of the EXMO platform Maria Stankevich claims that the first cryptocurrency has certain advantages in comparison with the US dollar. Among them are the absence of a single issuer, declining inflation and the final amount, which has a positive effect on the value of the coin. Thanks to these factors, the first digital currency can be safely called a more reliable asset than the dollar.

The American currency is limited only by fantasy and the work of the typewriter of the Federal Reserve System, which prints dollars uncontrollably, the expert continues. In addition, the global political situation and the strong dependence of the economies of many states on the American one indicate that the first cryptocurrency has become a very reliable protective asset.

“Digital” gold versus classic

This year, the first cryptocurrency is constantly being compared to gold. For example, experts from Bloomberg are convinced that bitcoin is turning from a speculative instrument into a digital version of the precious metal. The reason for the opposition of the two assets is the limited emission. Gold reserves will dry out by nature, and the reserves of the first digital currency are limited by the program code – more than 21 million tokens cannot be issued.

Stankevich claims that the first cryptocurrency and gold have a lot in common. Besides the limited issue, both assets are decentralized, difficult to counterfeit and easy to recognize. However, Bitcoin has several advantages. A digital asset is much more convenient to use for transactions: the payment transaction will be completed within a few seconds. In addition, such a transfer is quite easy to track.

The first cryptocurrency against stocks

In the early spring of this year, many markets collapsed. In connection with the record level of sales of assets by entrepreneurs, the leading stock indices fell by 25-35%. The shares of the companies that were affected by the pandemic fell several times in price. Some of them have not yet returned to pre-crisis levels.

The first cryptocurrency also experienced a crushing fall in March. The value of the token decreased from $ 11,000 to $ 3800, but almost immediately began to recover. By May, bitcoin quotes returned to their previous level, and by August they increased to $ 12,000. Stankevich is convinced that this fact indicates an increase in the interest of depositors in the digital asset and makes it more reliable.