Bitcoin Beats Gold In Settlement Despite 70% Price Drop
The value of bitcoin has been taking a beating since the beginning of the year. Since its high of $20,000 in December 2017, the price has dropped by 70 percent. Despite the fall, bitcoin is still doing well enough that it has beat gold's settlement volume on the market. This is according to respected cryptocurrency researcher Nic Carter.
This surprising result comes from the clearing statistics recorded by the leading sources for both markets. For gold, the London bullion market and other major clearing houses have tracked the over-the-counter market for the precious metal. According to them, the total transactions for gold for 2018 currently stand at $446 billion. This averages out at $30 billion a month.
Coin Metrics, a leading cryptocurrency market data provider has measured the number and value of bitcoin transactions in 2018. The current results have bitcoin transactions being valued at $848 billion as of August. Projections put the total worth of transactions to pass the trillion dollar mark by the end of the year. This is an interesting result since it seems gold will have a hard time catching up with just four months left to the year.
In a statement, Carter said
I'm conservatively estimating the London OTC market for gold, overseen by the LBMA, at 70% of global volumes. They publish clearing statistics. With these I can estimate the total net volume of regulated gold settlement at $446b for 2018 (based on 6 months of data). Conservatively, (adjusted estimates), Bitcoin has settled $848b this year, and is on track to settle $1.38T. Bitcoin, it appears, has quietly surpassed the OTC gold market in settlement volumes
This is just for the bitcoin market. Carter did not add other cryptocurrencies like Ethereum and Ripple. The overwhelmingly large number and value of transactions show how big the cryptocurrency market has grown. Plus, it shows the advantages of cryptocurrencies over gold like increased liquidity and transportability.
Cryptocurrencies Still Lacking
However, despite the value that these cryptocurrencies have gained, they still lack one aspect: being traded on the stock exchange. Other assets like gold and commodities can be traded using futures and exchange-traded funds (ETFs), providing them with another way to earn value and be more open to investors.
If bitcoin and other cryptocurrencies break into the funds market, they will be soon able to compete as another form of asset to investors across the world. This is why the upcoming decision on whether the US Securities and Exchange Commission (SEC) will approve the Van Eck Bitcoin ETF is highly anticipated.
Kate is market industry expert who has spent majority of her life on wall street, she has thought to have a knack at picking the right stocks to invest into. With the rise in cryptocurrencies she has is now able to use her expertise to a new market and give us insights on what we can expect in the present and the future.