‘Digital Gold’ Label Shifts as XRP Correlation to Gold Outpaces Bitcoin

The same can be said about the association between Litecoin and “digital silver”. The critical analysis of the relationships between cryptocurrencies …

Up until the most recent correction, Bitcoin (BTC) price was repeatedly pushing above $10,300 and attempting to reach a 2020 high above $9,500. 2020 started with a strong upward trend and altcoins followed Bitcoin’s price action, as thoroughly reported in Cointelegraph.

This aggregate trend leaves the door open for a full bullish period ahead since the last Bitcoin high growth period was between April and June 2019.

The volatile behavior observed since the start of the year may be causing the traditional assumptions associated with Bitcoin and other top currencies to be challenged. One of those assumptions is the belief that Bitcoin is closely connected to gold.

Cryptocurrency market monthly overview. Source: Coin360

Cryptocurrency market monthly overview. Source: Coin360

Cryptocurrencies and the precious metals narrative

A previous analysis reported by Cointelegraph has shown that the digital gold narrative attributed to Bitcoin may not be as realistic as investors believe. The lack of a significant relationship between Bitcoin returns and gold returns as well as the low correlations across the years are contributing to the challenge to the narrative.

The same can be said about the association between Litecoin and “digital silver”. The critical analysis of the relationships between cryptocurrencies and precious metals opens the door for further research.

Correlation between top 10 cryptocurrencies and gold

By analyzing the correlations between the top 10 cryptocurrencies in the market and gold returns during January 2020, we unexpectedly found that XRP, rather than Bitcoin, has the strongest correlation to gold. XRP is correlated at 34.1%, while Bitcoin is correlated at 21.5%. Moreover, both Ether (ETH) and Bitcoin Cash (BCH) share a very similar correlation to gold as Bitcoin does with 20.1% and 19% respectively.

In the opposite direction, Tether (USDT) has an inverse correlation with gold at -37.7%. This is surprising since the behavior of a stable coin like USDT could be more correlated with a precious metal like gold than a much volatile coin like Bitcoin.

A correlation of 100% means that each cryptocurrency and gold move completely in the same direction, while -100% correlation means they are inversely related, or in simpler terms, when one goes up, the other goes down. A correlation of 0% means that each cryptocurrency and gold is not related in any way.

Correlation between Bitcoin and the top 9 currencies since Jan. 1, 2020.

Correlation between Bitcoin and the top 9 currencies since Jan. 1, 2020.

By looking at a wider time frame like 2019, the assumption that Bitcoin is more related to gold is sustained. Bitcoin is correlated at 15.5% with gold for the entirety of 2019, being the most correlated currency with gold from the top 10.

As seen before, Bitcoin Cash is the second most correlated currency with Bitcoin at 8.2%, followed by Bitcoin SV (BSV) at 7.3%. For the entirety of 2019, XRP is less correlated (7.1%) with gold than in 2020, challenging the idea that a stronger correlation can be sustained over a long-term period.

Correlation between Bitcoin and the top 9 cryptocurrencies during 2019.

Correlation between Bitcoin and the top 9 cryptocurrencies during 2019.

Outstanding cumulative returns since the start of the year

The start of 2020 witnessed the start of a strong positive trend. If an investor bought any of the top 10 cryptocurrencies between Jan. 1, 2020 and Feb. 9, 2020, they would be looking at a cumulative return of at least 134%, when Tether is excluded from the analysis. From the top 9 currencies, Bitcoin produced the least profit, shifting one’s emphasis to the possible altcoin bull run ahead.

The biggest positive trend was seen by Bitcoin SV and Bitcoin Cash with a cumulative return of 228% and 179%, respectively. Other top coins like Binance Coin (BNB), EOS, Ether, Litecoin, Tezos (XTZ) and XRP offered investors a cumulative return between 138% and 167%. Meanwhile, gold prices grew by slightly more than 4% in January.

Cumulative returns for the top 10 currencies since Jan. 1, 2020.

Cumulative returns for the top 10 currencies since Jan. 1, 2020.

Cumulative returns for gold in January 2020.

Cumulative returns for gold in January 2020.

Which is digital gold, XRP or Bitcoin?

A recent report from Coinbase suggests that Bitcoin will come closer to becoming digital gold due to underlying features of the network which are similar to the ones shared by gold as the scarcity of the asset aligns with the assumed bullish period ahead.

However, the results also show that since the start of the year, XRP has been the cryptocurrency most correlated to gold and Bitcoin follows in second place. As we move further into 2020, the relationship between gold and Bitcoin may come closer to one observed throughout 2019, when the digital asset was the most correlated coin to gold.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Global Bitcoin Cryptocurrency Hardware Wallets Market to chart high growth owing to increase in …

Global Bitcoin Cryptocurrency Hardware Wallets Market to chart high growth owing to increase in demand by 2024 – Ledger, Trezor, ShapeShift, …

The research report on Global Bitcoin & Cryptocurrency Hardware Wallets market offers a detailed analysis of market features and a comprehensive study of market trends that are influencing the growth of the global Bitcoin & Cryptocurrency Hardware Wallets market. In addition, this report covers significant details about the market size, profit estimations, and market share to provide an accurate prediction about the global Bitcoin & Cryptocurrency Hardware Wallets market. Furthermore, the global Bitcoin & Cryptocurrency Hardware Wallets market report offers a precise competitive analysis focusing growth strategies implemented by the service providers. The global Bitcoin & Cryptocurrency Hardware Wallets market report also studies valuable source of significant data for market growth strategies. Additionally, the report offers historical as well as futuristic revenue, cost, supply data, demand, distributor, and value chain analysis. This report comprises complete information which improves the scope, understanding, and application of the global Bitcoin & Cryptocurrency Hardware Wallets market report.

Top Players Included In This Report:

Ledger

Trezor

ShapeShift

OPENDIME

Shift Cryptosecurity AG

ARCHOS

BitLox

CoolWallet

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Bitcoin Price Hits $10320 as Fed Chairman Confirms Crypto Is a Threat to US Dollar

“A ledger where you know everybody’s payments is not something that would … He also stressed the urgency of making quick progress on blockchain …

Bitcoin price and the overall crypto market reacted positively after Fed Chairman Jerome Powell recently stressed on the importance of private crypto-based transactions. He said that the Fed is working on a number of projects for digital currencies.

Bitcoin price surged over 5% on Tuesday, February 11, pushing it to a five-month high above $10,300 levels. With this move, BTC has surged nearly 50% since the beginning of 2020. At press time, BTC is trading 5.6% up for a price of $10, 304 with a market cap of $187 billion.

This latest price surge comes after the Federal Reserve chairman Jerome Powell expressed his interest in digital currencies. Congressman Bill Foster raised concerns about China’s aggressive push to the use of digital currencies. Responding to this, Powell said that the Fed has several projects underway.

This was enough to usher a fresh optimism in the crypto market. Apart from Bitcoin, a majority of the top-ten cryptocurrencies are showing gains between 5-10%. The overall cryptocurrency market cap added $20 billion soon after Powell’s comments, taking it to above $300 billion.

Powell Stresses Need for Private Crypto Transactions

Speaking on the issue of the American economy and its privacy policy, Jerome Powell also stressed the need for private crypto transactions. “A ledger where you know everybody’s payments is not something that would be particularly attractive in the context of the U.S.,” he said.

BREAKING: Fed Chairman Jerome Powell just came out in favor of private transactions for digital currencies.

He specifically said “A ledger where you know everybody’s payments is not something that would be particularly attractive in the context of the US.”

Game on 🙏🏽

— Pomp 🌪 (@APompliano) February 11, 2020

The Feb Chairman also assured that the U.S. is taking sufficient measures to keep with the pace of China’s development. Powell said that the Fed is currently investing a larger amount in digital currency developments. The cryptocurrency market took Powell’s comments is positive as the market surged soon after.

Besides, Powell also acknowledged that Facebook‘s entry in the crypto space with its native Libra cryptocurrency has been a game-changer. Facebook announced its Libra cryptocurrency in June 2019 but is yet to get regulatory approval for the same.

However, Powell admits that his agency understands the importance of digital currencies. And now it is working on further progress in this direction. He also stressed the urgency of making quick progress on blockchain development.

But Powell remains a bit skeptical about the implementation of the Digital Dollar due to privacy concerns. He added:

“The idea of having a ledger where you record everyone’s payments isn’t particularly attractive in the U.S.; it’s not a problem in China”.

It will be interesting to see how the Fed works out its way to accommodate digital currencies in the country’s financial ecosystem. One thing is sure that digital currencies have a huge role to play in the global economy for the next decade.

Altcoins, Bitcoin (BTC), Cryptocurrency News, News

Bhushan Akolkar
Author: Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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This Cryptocurrency Goliath Now Holds 277000 Bitcoin (BTC) Worth $2866000000 – Has …

Grayscale, the largest institutional asset manager in crypto, is now holding about 277,000 Bitcoin (BTC) worth $2.866 billion. The firm offers crypto …

Grayscale, the largest institutional asset manager in crypto, is now holding about 277,000 Bitcoin (BTC) worth $2.866 billion.

The firm offers crypto exposure through its Bitcoin-backed flagship product, the Grayscale Bitcoin Trust (GBTC). It also offers altcoin trusts, including Ethereum, XRP, Bitcoin Cash, Litecoin, Stellar, Zcash, Ethereum Classic and Horizen.

The company has released a new overview of its assets under management. It shows that Ethereum and Ethereum Classic are the second and third most popular cryptocurrencies among investors.

Source: Grayscale

The Grayscale Bitcoin Trust exploded in popularity in 2019 when the firm says the total investment across all of its products that year hit $607.7 million. That figure is higher than all cumulative investments from 2013 to 2018.

The company says institutional investors with deep pockets are fueling much of its growth.

  • 71% of 2019 investment came from institutional investors
  • Client base expanded by 24%, with existing clients accounting for more than 75% of capital raised
  • 36% of Grayscale clients now have allocations to multiple products within the Grayscale product suite

At the recent Crypto Finance Conference in Switzerland, Grayscale managing director Michael Sonnenshein said institutional money in the world of crypto has arrived, and Bitcoin is already eating into gold’s market share.

“I think one of the areas that’s already underway is taking share of the gold market – or Bitcoin or other digital assets emerging as this digital store of value. Perhaps gold and other things may have been that type of investment that had a place in a portfolio when the world was much more physical. For better or for worse – I would argue for better – the world has gone quite digital. And so, it’s time to start thinking about what constitutes a digital store of value, and so we start looking at things like Bitcoin.”

Moving forward, Sonnenshein believes Millennials and younger generations will also play a key role in the adoption of crypto assets.

“I think the analogue that’s not being discussed as much, which we find to be exceedingly important, is in the United States, over the 25 years, we’re looking at about $68 trillion that’s going to pass down from older generations, baby boomers, down to Millennials and younger generations.

So we’re certainly not going to go out and say that we think $68 trillion is moving into digital currency. What we do think, however, is investors today need to be positioning their portfolios and looking at skating towards where the puck is going.

Younger generations do not necessarily have the same investing preferences and the same kind of investments don’t necessarily resonate with them. And so if you are raised in the time of Apple and Venmo and Bitcoin, the ability to pay your friends digitally, buy a flight with airline miles, whatever it may be, we most certainly think that digital currency is going to be a recipient of some of that value as money is transferred from one generation to the next.”

In December, Charles Schwab released a report showing the Grayscale Bitcoin Trust is the fifth most popular equity among its millennial investors, ahead of Disney and Netflix.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Cryptocurrency Fraud Cases: TN Police Issues Warning To Investors

EOW has taken this decision in the backdrop of cryptocurrency fraudulent cases. In 2018, RBI had put a complete ban on cryptocurrency transactions …
Cryptocurrency Frauds In Tamil Nadu: Police Issues Warning To InvestorsCryptocurrency Frauds In Tamil Nadu: Police Issues Warning To Investors

In a bid to curtail cryptocurrency-based transactions in Tamil Nadu, the state’s Economic Offences Wing (EOW) has now issued a warning to individuals dealing with cryptocurrencies.

According to a report in The Hindu, the department has taken this decision in the backdrop of cryptocurrency fraudulent cases reported in Tamil Nadu. A few cryptocurrency investors were cheated in these cases, however, accused are now arrested, it added.

“The public is hereby advised not to deal with cryptocurrencies including Bitcoins, Ethereum, Ripple and more. Those trading in virtual currencies were doing so at their own risk, given that the Reserve Bank of India (RBI) has not given a licence or authorisation to any company to deal in such cryptocurrencies,” the Economic Offences Wing said.

Notably, RBI, on April 6, 2018, had told banks to withdraw all support services that were being extended to crypto entities, thereby announcing a virtual ban on cryptocurrencies. The deputy governor of RBI, BP Kanungo, had then suspected that the rise of cryptocurrencies beyond a critical limit might bring financial instability in the country.

The EOW further highlighted that cryptocurrencies are not a currency as per the definition of currency in India. It is not a derivative as well, it added. Explaining further, the department said that it is only a virtual currency that is similar to gold or precious metals which behaves more like assets rather than currency. “Most cryptocurrencies including Bitcoin, Ripple, Litecoin and Ethereum are not backed by a sovereign guarantee, and therefore are not considered as legal tender,” the notice added.

Unlike other investment options such as stocks, mutual funds, among others, there are no government organisations which regulate cryptocurrencies around the world. Once duped, investors are left with no option to redress their grievances. Moreover, the Indian government has not yet given the status of legal tender to any cryptocurrency.

RBI has warned investors about these risks many times in the past. Moreover, it has also highlighted that cryptocurrency can be used for unethical practices such as money laundering. To address these issues, EOW said that a draft bill has also been proposed to ban cryptocurrencies in the country and provide for official digital currency.

On the other hand, there are many startups that are urging the RBI to allow the flow of cryptocurrencies in the country. In an open letter written to finance minister Nirmala Sitharaman last month, cofounder and CEO of cryptocurrency trading platform, CoinDCX Sumit Gupta cited benefits of cryptocurrencies. Moreover, the Internet and Mobile Association of India (IAMAI) has also filed a petition in the Supreme Court in favour of open crypto regulation in the country.

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