BUY BITCOIN
While Bitcoin investors, traders, and enthusiasts are watching and waiting for the cryptocurrency to set a new all-time high, gold, the physical asset that it shares the most similarities with may beat it to the punch.
Here are the top three reasons why gold (XAUUSD) is poised to set a new all-time high, and how many of the same reasons that make the precious metal exceptionally bullish could eventually bode well for Bitcoin as well.
New All-Time Highs Incoming: Three Reasons to Be Bullish On Gold
This week, gold reached a new 7-year high on the XAUUSD trading pair before a pullback above $1,750 set the precious metal back slightly.
Price predictions range from $2,000 a troy ounce to over $3,000 an ounce within a year. The one thing that all of these predictions have in common: gold is expected to grow in value significantly over the course of the next several years.
ECONOMY dying. FED incompetent. Next BAILOUT trillions in pensions. HOPE fading. Bought more gold silver Bitcoin. GOLD @$1700. Predict $3000 in 1 year. Silver @ $17. Predict $40 in 5 years. Bitcoin @$9800. Predict $75000 in 3 years. PRAY for the BEST-PREPARE for the WORST.
— therealkiyosaki (@theRealKiyosaki) May 16, 2020
But why after an eight-year hiatus from stardom is the precious metal suddenly shining once again?
Here are three main reasons XAUUSD has enough bullish momentum to take it to a new all-time high.
Strapped Supply Meets Physical Scarcity
Few industries were spared from the impact of the lockdown conditions created by the outbreak. The mining industry and the gold supply chain was essentially shut down in its tracks as a result.
Gold refineries were producing less unrefined alloy, and fewer airlines and cargo ships traveling internationally meant the supply chain was essentially decimated in the early days of the crisis.
Related Reading | Precious Metals Tapping New Highs Bodes Well For Bitcoin
The lack of available supply and limited supply of the physical commodity led to increasing prices, fast. And while spot gold prices were rising, prices for physical bullion or bars has reached a high premium on top supplier websites.
Seeing prices rise beyond what XAUUSD price charts depict sparked FOMO in the gold market.
Thousands of Years of Trust
Investors are flocking to gold because the hard, limited supply makes it an ideal place to park capital during an economic crisis. The precious metal has been used throughout history for this very reason.
Dating back even further, it was among the first currencies, and before the Bretton Woods agreement, even dollars were backed by the precious metal.
Gold is used in everything from ornate jewelry to a conductor in PC motherboards. It’s familiarity as a decorative adornment, a color, and coin make it among the most trusted assets money can buy. Potentially even more trusted than money itself.
The only asset that theoretically offers more trust, is Bitcoin, due to a lack of a third-party controlling the decentralized, digitally scarce asset.
Hyperinflation is Coming
Perhaps the best reason for gold‘s bullishness, and the biggest factor in the precious metal reaching a new all-time high in the weeks and possibly days ahead, is due to the coming hyperinflation.
The Federal Reserve’s balance sheet is inching closer to reaching $7 trillion, only $2 trillion behind the asset’s entire market cap. And the Fed plans to print money out of thin air if required.
While the Fed’s money is the US dollar equivalent to IOUs it likely can never pay back, investors are flocking to gold, the hardest form of money to ever exist.
Related Reading | Gold Indicator Flips Green, Signaling Potential Decade of Uptrend
The same hyperinflation will also put Bitcoin to the test, to see if it can live up to the digital gold moniker and shine the same way XAUUSD will amid the coming economic downturn.
While there are more reasons to be bullish on XAUUSD, these three are among the most critical factors that indicate that gold will reach a new all-time high and prices of over $2,000 to $3,000 a troy ounce.
