No matter from which point of view, bitcoin is the best performing risk asset in 2020. Without it, even gold can't compare with it. Interestingly, in the process of bitcoin's continuous rise for more than a year, the capital inflow of bitcoin is in sharp contrast to the capital outflow of gold. In the last half of the year, the gold market has outflow of more than US $7 billion, while the bitcoin market has inflow of US $2 billion. So what's the impact of rising bitcoin prices on gold? Can bitcoin replace gold?

1、 The rise of bitcoin price will cause the fall of gold price to some extent.

As we all know, bitcoin, like stocks, is a risk asset, while gold is a safe haven asset, and risk assets and safe haven assets are naturally opposed. Therefore, when the price of bitcoin continues to rise, it means that the global risk investment preference is very high, and the stock market will continue to strengthen. For example, from April 2020, the U.S. stock market will continue to rise, constantly reaching new historical highs, and bitcoin will also continue to reach new historical highs at the same time. At this time, the global hot money will continue to flow out of gold and other risk averse assets, and continue to flow into bitcoin and other securities The stock market. Therefore, the rise of bitcoin price will cause the fall of gold price to a certain extent.

2、 Bitcoin cannot replace gold.

Although bitcoin's rising trend is very optimistic, the money making effect seems to be very good, and it is a scarce variety, with only about 22 million pieces, it still can't replace gold.

First of all, bitcoin is a virtual currency, just a string of codes. Once major global economies declare that it is invalid to use bitcoin for economic and trade settlement, the price of bitcoin will collapse. Gold is the ultimate embodiment of wealth. Any currency is just the manifestation of gold. No matter the pound in that year, or the dollar and bitcoin now, they are only used to measure the value of gold.

Secondly, gold is not only the ultimate embodiment of wealth, but also a commodity and industrial raw material. A lot of modern equipment and precision instruments need to use gold, which bitcoin obviously can't compare with.

Finally, as a luxury, gold can be worn on the body to show its status and taste, but we can't wear bitcoin on the body for others to observe.

In conclusion, at present, bitcoin's soaring price will indirectly depress the price of gold, but it still can't replace the position of gold in the eyes of the world.

(2021-4-9)