What Happens to the Economy: Global Funds are Stocking Gold And Investing in BTC
According to the latest news, there is a serious increase in the amount of gold in global funds. It is also no secret that institutional investments in Bitcoin and cryptocurrencies have increased. In addition, the noticeable increase in the prices of cryptocurrencies and the increase in the general market value also show that people carry their investments in different assets to cryptocurrencies.
Gold Stock Broke A Record
According to a report shared by AA, the amount of gold in global funds almost broke a record in January. In a report shared by the World Gold Council, it is stated that the amount of gold in global funds has increased by 61 tons last month to 2,947 tons. According to the statements made, this figure goes down in history as an all-time record.
In addition, gold generated a 4.6% return in January. Considering this ratio, it became one of the assets that achieved the best acceleration in traditional assets. It was an expected situation that the interest in gold increased due to the events in the world that affect everyone globally. However, a record-breaking of funds in gold investment can be perceived as a sign that something is happening in the global economy. Moreover, the increases in gold prices show that not only institutions but also individuals carry their investments.
We can attribute this increase in gold stock to both the expected global economic crisis and the global problems since early 2020. For example, due to the decreases in the economy due to the Coronavirus, which emerged in Wuhan, China and then spread all over the country, people turned to gold, which was seen as a safe haven. Because, the prices of many assets, especially oil, decreased seriously even for this reason.
In addition, the FED’s constant depreciation of the dollar dropped the value of those who invested in dollars. Institutions started to withdraw funds from individuals in a way that we called “under the pillow” with funds and individuals. Because at the moment it is not clear which level of the traditional currency will fall in the coming months. Therefore, people and institutions are trying to protect the value of their funds.
Where Is Bitcoin In This Business?
Actually exactly next to gold…
I think everyone who is interested in cryptocurrencies knows that Bitcoin is considered as “a safe haven and digital gold”. Bitcoin is likened to gold in many ways, such as having a certain amount of supply and acquiring both with mining. Now, we also add the “safe harbor” feature.
We have witnessed many times that people are investing in Bitcoin with gold in many cases that affect the economy globally. We have even seen that in such cases, Bitcoin has increased much more than gold.
Individual investors prefer to move their investments to Bitcoin, which is not controlled by any central bank or government, as gold is a regulated asset. Because, in the event of an economic crisis, banks and governments can intervene under what they hold, but they cannot interfere with Bitcoin.