Investors are accumulating both Bitcoin and gold at the same rate, says a former Goldman Sachs investor. Different blockchain analytics firms also claim that new institutional investors are entering the Bitcoin arena since the start of 2020.
Jason Urban, CEO of DrawBridge Lending, said that he sees investors who are buying both gold and Bitcoin at the same pace. These are the same people who bought Bitcoin and other precious metals in the past, but now, they are also betting on Bitcoin.
“As someone dealing in the institutional space, the same people that I see buying gold and other precious metals are also buying Bitcoin and they’re doing it simultaneously and they’re doing it in equal amounts currently,” said Urban in an interview with Kitco News.
New Alternatives to Economic Change
The economic environment is changing and taking a new direction. The top digital asset has attracted more investors and traders after the Coronavirus pandemic as it can act as the best hedge against economic volatility. DrawBridge Lending CEO stated:
“I take the defensive stance because what we’re currently seeing is really truly unprecedented and we haven’t gotten completely through the snake so to speak… I like traditional hedges against inflation like precious metals gold, silver, but I also like the new alternatives like Bitcoin and other digital assets.”
Both assets have a common quality known as scarcity. As gold has a limited supply, Bitcoin has a finite supply which inspires traders and investors. So, no one can add more supply, thus no concept of inflation, which is common in traditional assets.
“With the dollar, if you just held cash in your bank account, there’s always the inflationary specter that the government starts to print more money, but there is no government printing more gold, and there definitely is no government printing more Bitcoin,” he added.
If we compare both, Bitcoin is similar to gold in all features, but it has an exceptional feature called volatility, which is also not a bad thing. Urban explained,” Being more volatile is one of the areas where it deviates, but if it was exactly like gold, there would be no need to hold both gold and Bitcoin.”