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Bitcoin no substitute for gold

Bitcoin no substitute for gold
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Cryptocurrencies such as bitcoins are no substitute for gold as the latter is a tried and tested effective investment tool in portfolios, says World Gold Council (WGC). 

Hyderabad: Cryptocurrencies such as bitcoins are no substitute for gold as the latter is a tried and tested effective investment tool in portfolios, says World Gold Council (WGC).

Bitcoin’s parabolic price rise was the big story of 2017, putting the spotlight on the cryptocurrency market. While gold’s performance was a solid 13 per cent, it was a fraction of the 13-fold increase of bitcoin by the end of the year.

Brushing out recent claims by some analysts stating cryptocurrencies could replace gold in the near future, WGC said: “Cryptocurrencies may become an established part of the financial system. But, in our view, gold is very different from cryptocurrencies. Gold’s role as a mainstream financial asset will likely continue to resonate in today’s digital world, it said in a latest report.

The cryptocurrency market has been estimated at over $800 billion. Bitcoin, the most widely recognised cryptocurrency, has had rapid price growth over the past few years – increasing 13-fold in 2017 alone, it added.

“Some commentators went as far as to claim that cryptocurrencies could replace gold. But, in our view, gold is very different from cryptocurrencies,” the report said. Gold, which has a well understood role in an investment portfolio, is less volatile, has a more liquid market, traded in an established regulatory framework, it added.

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