Many Analysts Are Once Again Claiming Bitcoin Is "Digital Gold"

The recent price revival of bitcoin has got everyone feeling hopeful again. So much, in fact, that bitcoin is (for the umpteenth time) being labeled digital gold.

The Reputation of Bitcoin Is Again Reaching a High Point

The price of bitcoin recently rose beyond the $26,000 mark. The news was interesting and odd in many ways given it was happening during a time when several banks (Silvergate, Signature, Silicon Valley, etc.) were crashing and burning. In addition, these banks had hardcore ties to crypto or held digital assets for clients, so it’s interesting to see so many crypto-centered enterprises dropping like flies while assets themselves are on the rise.

This is giving a resurgence to bitcoin, and many people’s opinions of it are flying high at the time of writing. Several analysts are now commenting on the situation and claiming bitcoin is similar with gold, a precious metal known for retaining its value even during times of hard economic strife.

Glen Goodman – a crypto analyst and author – said on social media:

Fascinating to see bitcoin break away from its correlation with stocks… and instead align itself with gold. Has the ‘BTC is a store of value, its digital gold’ narrative returned? Clearly [the SVB collapse] has shaken faith in traditional banks.

To an extent, some of these comparisons and jumps into the land of extreme positivity could be a little premature. We’re still very much in the early days of this crisis and 2023 on a whole, which means that there’s still a lot of room to recover from the tremendously bearish conditions we witnessed last year.

During 2022, bitcoin lost more than 70 percent of its value, and while it’s currently at a nine-month high, things aren’t anywhere near the $68,000 (from November 2021) peak we saw.

Still, several industry heads appear rather happy about the overall shift in sentiment, with Nigel Green – CEO of financial consultancy firm deVere Group – commenting:

Investors are looking for alternative currencies, such as cryptocurrencies. Moving forward, these will increasingly compete with traditional, fiat ones, and this will help trigger the decreasing dominance of currently leading international currencies.

Of course, there are occasional doubters throwing themselves into the mix, one of which is Senator Sherrod Brown of the Senate Banking Committee. He commented that firms like Silvergate – which were allegedly so tied to crypto – were likely to fail given how unreliable digital assets tend to be. He said:

As the impact of FTX’s collapse continues to ripple outward, today we are seeing what can happen when a bank is over-reliant on a risky, volatile sector like cryptocurrencies. As the bank of choice for crypto, Silvergate Bank’s failure is disappointing but predictable.