Gold and silver have taken a backseat to Bitcoin-mania, but they are still more relevant assets. Bitcoin has dominated the financial news cycle, but in the long run, this particularcryptocurrency might be more bark than bite. Although the technology of blockchain and cryptocurrencies will live on, the way the financial markets have pinpointed Bitcoin as the end-all-be-all for forex trading gold news kitco complex is arguably flawed logic.
The cryptocurrency idea is less than a decade old and will undoubtedly experience growing pains. Since when does doing algebra instantly create a valuable asset? Further, Bitcoin was never intended to be an investment vehicle and would likely prove to be less valuable than just about any tangible asset on the planet should the world undergo a calamity. In short, its astronomical value is the result of perception not reality. I’ve always had reservations regarding the practicality of gold being an efficient medium of exchange, but the truth is it has been used by mankind for millennia.
More importantly, the gold market is extremely deep. Investors in gold bullion, casual collectors, technology manufacturers, and those valuing its beauty, are all holding a piece of the pie. Despite the excitement over Bitcoin and the widespread expectations that it is a sufficient replacement for gold, there are some serious consequences of holding Bitcoin relative to gold that the market is not currently accounting for. These security risks might be enough to counterbalance the yearning for massive gains which might never be realized due to challenges in logistics in liquidating cryptocurrency assets in an illiquid environment and a lack of regulatory safeguards. For instance, one of the appealing aspects of Bitcoin is the fact that it bypasses banks and other financial intermediaries. This introduces a counterparty risk that most other financial transactions and assets aren’t exposed to.
There have been a handful of Bitcoin brokers leave the business due to solvency or fraud issues. Those holding Bitcoin at those particular brokerages are simply out of luck. Also, the internet is riddled with stories of Bitcoin holders who have lost access to their Bitcoin assets due to hacked computers, compromised email accounts, or simply losing an associated pin number. Gold and silver bullion investments, on the other hand, are generally sitting in a bank safe with protections most citizens wouldn’t be capable of employing on their own.
Now that we’ve established that precious meals are a more legitimate asset than the existing cryptocurrencies, let’s peek into what might be in store for both gold and silver as we head into 2018. That said, we hesitate to make any bold calls in such a lengthy time horizon. A year is a long time and the fundamental backdrop can change dramatically. Throughout the latter part of 2017, both gold and silver waffled in price due to a lack of interest. This isn’t surprising, traders are focused on alternative assets such as Bitcoin, the stock market is performing better than nearly all periods in history, and there hasn’t been an immediate need for risk off assets in recent years. Accordingly, precious metals have fallen victim to a lack of attention and trading interest. 1,200 support levels as determined by uptrend lines.