BNY Mellon Report Compares Bitcoin and Gold, Study Says ‘Gold Is the Only Globally Accepted Currency’
Gold, a popular safe-haven asset, recently posted its lowest level in three weeks as a strong dollar and bond market yields weakened support for the precious metal. Financial behemoth BNY Mellon has also released a report on the difference between gold and bitcoin, and the study indicates that the crypto asset fits the description of an emerging currency.
Strong dollar and Treasury yields take toll on gold market
The U.S. dollar has strengthened over the past two weeks, and crypto assets such as bitcoin (BTC) have also increased in value. However, the precious metal (PM) has seen better days as the price of gold has fallen in recent weeks. Last week gold fell below $1,700 per ounce, but today the PM managed to break above the psychological price zone. At the time of publication, fine gold (999) was trading at $1,716.30 per ounce, after rising 1.7 percent over the past 24 hours.
Current gold and silver prices.
Gold miners and economists are discussing Joe Biden’s proposed $3 trillion stimulus package, which could boost gold, silver and other assets considered hedges against inflation. Jim Wyckoff of Kitco Metals said the recent rise in the dollar and insane interest rates on Treasury bonds are limiting buyer interest.
Rising gold and silver markets need a fundamental spark, noted a senior analyst at Kitco Metals. Wyckoff also noted that the two main market players, gold and silver, are under technical selling pressure from short-term futures traders on still unfavorable short-term charts. Meanwhile, cryptocurrency markets have shown some recovery after prices rebounded from their 13-month highs. March 2021 was down, while gold was down.
BNY Mellon report compares bitcoin and gold.
In addition, the financial institution BNY Mellon has published a comprehensive study on the characteristics of the crypto assets Bitcoin (BTC) and PM Gold. The BNY Mellon report focuses on the controversial stock-to-flow ratio (S2F) and the Plan B creator’s alternative model, called the stock-to-flow cross-flow (S2FX) model.
The conclusion of this model is that bitcoin is gaining popularity and becoming more like gold, BNY Mellon said in a report. The cost of scarcity (as measured by S2F) and subsequent halving will eventually cause prices to fall into a cluster of gold points and assume a general market value.
Researchers at BNY Mellon did not believe in the digital gold theory and pointed out that BTCs fit the description of a coin in the making. Although the financial institution’s report states that bitcoin may have similarities to gold, and that BTC may resemble popular PMs.
Bitcoin is also often compared to gold, notes BNI Mellon in its study. There are indeed many similarities, and gold is a worthy model for bitcoin. Gold has been accepted for centuries as a store of value and a medium of exchange (today it is mainly used as a store of value and hardly as a medium of exchange). We believe that gold is also the only globally recognized currency that circumvents the problem of sanctioning individuals.
However, in mid-February 2021, BNY Mellon established a digital currency unit that plans to hold, transfer and issue bitcoins.
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