Bitcoin: the new digital gold?

Two economics researchers say that Bitcoin can be considered a safe investment, as well as gold, making cryptocurrency the " new digital golde ".

To conduct their study, François Longin, researcher and professor of finance at ESSEC Business School and Konstantinos Gkillas, researcher at the University of Patras, used the theory of multivariate extreme values.

“First, given the positions in the stock markets, we find – like previous studies – that the correlation of extreme returns increases during stock market crashes and decreases during stock market booms. This indicates that Bitcoin could provide the desired benefits of diversification. A similar result is obtained for gold, confirming its recognized safe haven status in the event of a crisis, ”they wrote.

They also found a weak correlation between Bitcoin and gold which would allow the two assets to be used together in the event of turbulence in more traditional markets.

“This evidence shows that Bitcoin can be considered the new digital gold. However, gold itself can still play an important role in managing portfolio risk, "they concluded.

However, for other finance specialists, such as Jim Powers, the director of research at Delegate Advisors, Bitcoin is not the new gold because it relies heavily on the internet and "the old gold is still doing its job well."

“Although there are similarities between gold and Bitcoin (for example, a store of value, a price determined by supply and demand), gold has been recognized as a store of value for millennia. Then there is the addiction of Bitcoin with Internet. In a fin-world style financial apocalypse, individuals can still hold and trade physical gold. Try buying a loaf of bread with Bitcoin if the internet is down, ”he explained on Forbes.