Still, the report talks of a complementary yet opposing relationship between gold and bitcoin. It notes:
If you had invested in gold, you would have made 52%, and 64% from investing in bitcoin. However, if you had invested in both of them on a 50/50 basis, and rebalanced each month, you’d now have 93% (to end of August 2020 ByteTree data).
Morris references the year 2013, which he says was a specular year for social media stocks (62%) “which supports my view that bitcoin is a growth asset.”
Explaining bitcoin’s relationship with other assets, one of the report’s co-authors, Charlie Morris, Co-Founder and Chief Investment Officer at Bytetree, says because it (bitcoin) is “responsive to monetary conditions, it is naturally correlated with risk-on assets, including equities and credit.”
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Morris adds: “Hypothetically, when interest rates are falling, and inflation is rising, that is the perfect storm for gold. Conversely, tight money occurs when rates rise faster than inflation; a condition that is devastating for gold.”
To support these findings, the report points to the collapse of the gold price in Q2 of 2013, after the US Federal Reserve signalled it would raise rates in the future. During that period bitcoin value surged. In fact, the report asserts “that 2013 was bitcoin’s best-ever year (5400%) and gold’s worst year (-28%) since 1981.”
The post Report: Bitcoin Surges With Rising Real Interest Rates and Economic Stimulus While Gold Performs Better With Rising Inflation appeared first on Bitcoin News.
What are your thoughts on the report’s description of the relationship between bitcoin and gold? Share your views in the comments section below.
The report concludes that “notwithstanding the shared love of stimulus and an inverse reaction to the dollar, gold and Bitcoin are more opposite than alike.”
A new report by Bitstamp and Bytetree says bitcoin responds better to the rising money supply, rising real interest rates and a strong economy. This is in contrast to gold which appears to perform better when real interest rates are falling while inflation is rising.
Gold, on the other hand, “thrives on falling real interest rates, rather than central bank stimulus, because it has a strong link to inflation.”
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