Opinion: Bitcoin is a "safe haven asset" more attractive than gold

2023-10-25 03:00:27

By James Cirrone, Blockworks; Compiled: Pine Snow, Golden Finance

On Monday, asset manager Alliance Bernstein released a memo that unabashedly compared bitcoin to gold, calling it a “safe-haven asset.”

Analysts emphasize that in addition to Bitcoin’s intrinsic value derives from its limited supply of 21 million bitcoins (known as the “hard currency attribute”), the asset’s return is undeniable.

“Since its inception, Bitcoin has outperformed gold,” analysts wrote in an October 16 note. “Over the past 3 years, gold has been flat, while Bitcoin has risen 150% (despite a 60% decline in 2022).”

They write that over the past five years, Bitcoin has returned five times more than gold.

This article was written before the recent multi-day Bitcoin rally, which began rising back on Sunday evening, when Bitcoin (BTC) was trading close to $30,000. Then, in the early hours of Tuesday, the stock peaked at $35,100 before dropping to just under $34,000 at launch.

Analysts also noted that bitcoin is a young asset compared to gold, which launched the first ETF to track commodity prices in 2004.

In fact, speculation about a possible ETF is exactly what is currently driving Bitcoin’s value up, although some industry watchers believe that such price action is premature, as ETF approval is subject to SEC. So far, the SEC has been dragging its feet, delaying multiple spot Bitcoin ETF applications several times during 2023.

According to AllianceBernstein, Bitcoin’s main hurdle is its “UX UI” issues. Analysts believe that with the advent of spot Bitcoin ETFs, this problem can be reversed.

"The inaccessibility of crypto wallets and the dangerous record of exchanges prevent Bitcoin from entering the mainstream. A Bitcoin ETF will make Bitcoin available in brokerage accounts and integrate perfectly with private banks and wealth managers/advisors. AllianceBernstein analysts wrote.

As the SEC refuses to appeal the August ruling in favor of Grayscale, Grayscale could win the competition for Bitcoin ETFs. The Washington, D.C. Court of Appeals said the SEC’s blocking of the company’s Bitcoin Trust Fund (GBTC) from setting up an ETF was “arbitrary and capricious.”

Source: Golden Finance

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