Bitcoin and gold now have one of the fiercest rivalries ever recorded in the financial markets. These two assets, one physical and the other virtual, have provided investors with a way to earn and protect their wealth. However, with the advent of bitcoin technology, it has become a fight for which one is not only the best investment option but the best hedge against inflation.
Investors have naturally camped on the side which they believe has the most potential. Others see both assets as necessary for the future. For Bobby Zagotta, CEO of Bitstamp USA, he sees the cryptocurrency catching up to its physical counterpart in terms of trading.
How Bitcoin Could Trade
Even though there has been a decline in the volume of bitcoin trades conducted in the current climate, Zagotta explains how the exchange has seen traders’ risk appetite change. Talk to CNBC, the CEO notes that crypto investors were starting to take less risk. This is mainly attributed to the current global crisis which has affected the financial markets and as a result there has been an increase in the volume of stablecoins held by investors.
Crypto investors typically fall back on stablecoins in times of great uncertainty when trying to combat market fluctuations. This has been accentuated given the recent ongoing Russian-Ukrainian war and financial markets have taken a hit. Cryptocurrencies were not left out with a crash the day Russia invaded the tiny country, forcing investors to be more cautious.
BTC trading above $39K | Source: BTCUSD on TradingView.com
Highlighting the volume of the exchange, the CEO notes that more and more investors are turning to stablecoins in these times. Regarding bitcoin, Zagotta explained that with more mainstream adoption, bitcoin could see itself playing the same role as gold in the future. This means that the digital asset would start trading like its physical counterpart. But for that to happen, more regulatory clarity would be needed, the CEO added.
BTC on a recovery trend
Bitcoin and the rest of the market have suffered declines lately. The most notable of these was the stock market crash that occurred in December last year, leaving the market extremely vulnerable. Even though most digital assets saw recoveries after this crash, its effects are still being felt across the broader market.
Related Reading | Kazakhstan’s crackdown on illegal mining forces 106 miners to close up shop
Bitcoin itself mounted various recoveries following this. It has breached the $40,000 resistance point four times this year alone. While it may not hold that point, it speaks volumes about the incredible resilience of the digital asset and the bulls backing it.
As for the cryptocurrency’s reaction to the ongoing conflict, it has since leveled off since it was first hit following news of the invasion. More and more investors are still turning to crypto to serve as a store of value, while others, such as Russian citizens, find themselves unable to use these digital assets during these times due to bans and restrictions. penalties.
Featured image from Capital.com, chart from TradingView.com