Gold would be a 40% better investment than Bitcoin in 2022
Bitcoin supporters have argued that the mature asset will replace gold as the supposed stockpile of wealth and a hedge against inflation. However, Bitcoin and the general cryptocurrency market have underperformed in 2022 compared to gold.
Data taken from the Finbold Bitcoin ROI tool that allows users to compare the return on investment (% ROI) of BTC compared to traditional assets such as stocks, currencies, indices and metals, indicates that compared to gold, the Bitcoin return has given poorer results . yellow metal with 40.41% so far this year.
However, Bitcoin has still maintained a superior ROI over Bitcoin over the past four years of 534.24%. Other precious metals, including silver and platinum, surpassed Bitcoin since the beginning of 2022 by 35.24% and 39.49%, respectively.
Bitcoin began the year in hopes of building on the highest record of nearly $ 68,000 in November last year. At the start of 2022, the crypto was valued at $ 46,700 and has fallen by over 55% to trade at $ 20,800 at press time.
Bitcoin’s losses will increase in 2022
The loss of the flagship cryptocurrency in 2022 affected the general market, which has lost over $ 2 trillion in market value. The losses also culminated in Bitcoin registering its worst quarter in over a decade after the value plunged by over 56% during the second quarter of 2022.
Interestingly, both Bitcoin and gold have operated in an environment of high inflation with possible continued interest rate hikes from the Federal Reserve.
Gold performance in the current environment may be linked to the existence of metals for decades, while Bitcoin is a young asset class on the road to maturity. Therefore, the lack of longevity reduces Bitcoin’s ability to be an effective hedge against inflation.
In addition, Bitcoin’s prospects have been complicated by the ongoing regulatory uncertainty that has accelerated with various jurisdictions moving to protect consumers. In addition, Bitcoin’s price has been affected by the controversial Terra (LUNA) ecosystem crash that potentially led some investors towards assets such as gold due to eroding confidence.
The future of Bitcoin and gold
Despite the fact that Bitcoin registered a negative return in 2022, proponents of the asset believe that it will surpass gold over the next few years. As reported by Finbold, Ronald-Peter Stoeferle, managing partner of the investment management firm Incrementum AG, noted that Bitcoin has overshadowed gold despite the ongoing bear market. In the long run, Stoeferle stated that Bitcoin will become a less risky asset and eventually become a value store.
In addition, Bitcoin’s price movement has correlated with the general stock market. This correlation is seen as a confirmation that Bitcoin is a risk asset.
In particular, despite outperforming gold, Bitcoin outperformed selected stocks in 2022. According to Finbold’s report, PayPal (NASDAQ: PYPL), Etsy (NASDAQ: ETSY), Netflix (NASDAQ: NFLX), Snap (NYSE: SNAP), and Shopify (NYSE: SHOP) outperformed Bitcoin.
Disclaimer: The content of this page should not be construed as investment advice. Investment is speculative. When you invest, your capital is at stake.
