Bitcoin and other electronic currencies present a new form of investment that’s turning heads across the financial world.
While Bitcoins have gained impressive traction in recent years, can this new and unproven market match up to gold?
Bitcoin is a cryptocurrency, so called due to the encrypted data used in its transaction. Although cryptocurrencies have become very mainstream, it’s not an easy technology to understand (An explanation can be found here) and has become synonymous with volatility.
Bitcoins have gained substantial traction over the last few years. The original Bitcoin cryptocurrency has been joined by a slew of other smaller popular but still substantial cryptocurrencies including Ethereum, Binance and Tether.
The value of Bitcoin went through a meteoric rise just as the pandemic was bringing the physical world to a halt. Between March 2020 and Nov 2021, the value of bitcoin rose from around £4,000 to over £48,000, before falling all the way back to around £14,000 in late 2022.
This volatility in the price of the coins has been exacerbated by the collapse of several crypto exchanges, and some newer coins as well. Hailed as an alternative to gold, cryptocurrencies have clearly shown they are not a safe-haven asset.
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