This week, silver saw a 5% gain and revisited a 3-month high. Gold set a new eight-year high, reaching over $1,750 per troy ounce. The boost in precious metals also bodes well for Bitcoin, which has been rising in tandem.
With both gold and silver each setting new local highs, will Bitcoin price finally take out $10,000?
Supply Struggle Drives Price of Silver and Gold to New Local Highs
A massive supply crunch on silver and gold has pushed precious metals to new local highs. Silver reached over $17 an ounce, up over 14% since the start of the month.
Gold started the week trading above $1,750 and is expected to reach prices as high as $3,000 over the next year, according to Rich Dad, Poor Dad author, Robert Kiyosaki. Bank of America points to $2,000 per troy ounce for the precious metal.
Others aren’t as convinced by the demand.
Precious metals gold and silver rising aren’t too surprising, as these assets have historically acted as a safe haven for capital during times of economic distress.
The scarce supply of these assets combined with stimulus money both inflating the dollar and being rerouted into investments could be responsible for the added momentum.
Can Bitcoin Outshine Precious Metals As a Safe Haven Asset?
Gold and silver rising in the face of economic crisis due to their limited supplies, bodes extremely well for Bitcoin. While gold and silver are indeed scarce, there’s no telling how much supply remains to be mined from the earth or elsewhere.
Bitcoin, however, is hard-capped to only ever allow 21 million BTC to exist. This extremely limited supply gives the asset similar attributes to precious metals. It’s earned the moniker digital gold as a result.
The same stimulus money, recipe for hyperinflation, combined with digital scarcity has created an environment in which Bitcoin can thrive.
Investors are taking note, and the asset has increasingly snagged the attention of institutional investors, and even the likes of legendary hedge fund manager Paul Tudor Jones.
Related Reading | Strong Correlation Between Bitcoin and Stock Market May Finally Be Over
Bitcoin‘s growth and interest are closely following gold and silver, further proving the asset’s potential value as a safe haven asset.
In the below chart, following the Black Thursday crash, each asset has made a strong climb since and shows similar price action and correlation.
Silver is pacing slightly behind gold and Bitcoin, with gold acting as the clear front runner. Gold is an asset that’s been trusted for centuries and in use for just as long. Cryptocurrencies are a brand new, untested asset class, yet are still showings strong promise alongside these two precious metals.
Is this Bitcoin‘s time to shine brighter than gold and silver?