Along with the cryptocurrency evolution, researchers have discovered a unique phenomenon in the global financial market. While digital currencies’ prices have seen a huge decline over the last few weeks, it has been noticed that the gold’s value has increased substantially.
Can these be inversely proportional? The researchers believe that the value of gold on the financial market is related to virtual coins.
Over the previous year, there was a significant increase of the virtual coins’ values, while the price of gold fell enormously. In December 2017, 1 BTC has reached its spectacular point of 20.000 US Dollars.
Due to the considerable decreases in the cryptocurrencies’ prices recorded on the global market, it was possible to observe the opposite slope of the gold value.
To argue with this opinion, the Director at Coininvest– Daniel Marburger, said in an interview that “on 16 January 2018 he sold 30 kilograms of gold for Bitcoin”.
People began to wonder how they could turn virtual currencies into gold, relating to Daniel Marburger’s explanation “We have been inundated with emails, and the phones have been ringing continually with customers asking how they could turn their cryptocurrency into gold”.
The researcher Scot Macdonald from Seeking Alpha has discovered that the inverse relationship between Bitcoin and gold has been marked especially by the introduction of Bitcoin’s futures contracts. He also argues that the demand for futures contracts will increase significantly in the coming months.
Macdonald is supporting users to buy Bitcoin, relating his research “Based on my analysis, you should buy Bitcoin and sell gold in the coming week”.
According to Scot Macdonald’s research, he argues that this inverse relationship between digital currencies and gold could predict their price fluctuations. This means that when Bitcoin’s price drops, we will be sure it’s the right time to sell gold, and vice versa: when Bitcoin’s price increases, we can invest in gold.
“The increase in the price of Bitcoin has outdone almost anything in history. What I find interesting is that when you analyze what has taken place, it has demonstrated what can happen to the actual price structure of an asset in a free enterprise environment that is not controlled by central banks or a government”, relates Scot Macdonald in his report.
The Founder of Goldcore, Mark O’Byrne says that he also noticed the same strong relationship between these two markets. “[Bitcoin traders] told us they were concerned that the massive price appreciation was unsustainable and they got nervous about it — We think increasingly people are realising that these digital assets have much higher risk levels than the traditional safe haven asset”, said O’Byrne for TheTimesUk.
Do you think these two markets are inversely proportional? Would you exchange, at the moment, Bitcoins in gold as Scot Macdonald recommends?