For several years now, bitcoin has been compared to gold since both assets are perceived by their proponents as haven assets. So far in 2020, Bitcoin has gained massively currently approaching $19,000. Some analysts think that the flagship cryptocurrency will record an all-time high before the end of 2020.
Being the best-performing asset of the year, the crypto has attracted many investors including corporates and institutions. In that context, Rick Rieder, the managing director, and chief investment officer of BlackRock Inc., the world’s biggest asset management company, said that bitcoin is better than gold.
While speaking in a CNBC interview, Rieder acknowledged that bitcoin more functional than gold currently. Recently, he expressed optimism towards making investments in emerging markets due to the low-yield environment in the United States; and Biden’s presidency which supports moderate global policies. Bitcoin falls right in this space.
The BlackRock CIO added that the “receptivity” of virtual currencies and technology among the millennials is considerably high. Additionally, the central banks considering CBDCs adds to the narrative that bitcoin can become a stable haven asset. Rieder believes that the cryptos are here to stay.
Also, on BTC’s proposition as a competitor to gold, he said:
“Do I think it’s a durable mechanism that will take the place of gold to a large extent? Yes, I do, because it is so much more functional than passing a bar of gold around.”
Despite the SPX and gold exploding to new highs, bitcoin’s growth has by far outpaced all investment assets in 2020. The market cap of bitcoin is near 2.5-2.75% of the gold market.
Institutions like BlackRock considering investing a small percentage of their portfolio in bitcoin may result in significantly higher bitcoin prices.