Trump’s Focus on Bitcoin: A Threat to Gold’s Dominance?
As the 2024 US presidential election gains momentum, Donald Trump’s focus on Bitcoin has sparked concerns that it could threaten gold’s future as a leading investment asset and inflation hedge. Gold prices have been under pressure, while Bitcoin has thrived, with the digital gold rallying to an all-time high of over $93,400.
Maruf Yusupov, co-founder of the gold-backed stablecoin Deenar, believes that Trump’s focus on Bitcoin could stem the dominance of gold as a hedge against inflation moving forward. “Despite its century-old relevance, the focus on Bitcoin might stem the dominance of gold as a hedge against inflation moving forward. This implies that investors might shift funds from gold to Bitcoin, fueling a rapid rally for the latter,” Yusupov told crypto.news.
Yusupov also notes that the Federal Reserve’s hawkish stance could negatively impact the attractiveness of gold, making Bitcoin a more appealing option for investors seeking diversification. “Investors who want to diversify their capital may choose Bitcoin instead, as it is known for its relatively higher yield,” he added.
The proposal by Republican US Senator Cynthia Lummis to sell some of the Fed’s gold to accumulate Bitcoin as a national reserve further supports the notion that gold’s dominance is under threat. With the US having 8,133 tons of gold reserves, a shift in focus towards Bitcoin could have significant implications for the gold market.
Predictions:
- Gold prices may continue to decline as investors shift their focus towards Bitcoin and other digital assets.
- Bitcoin may experience a rapid rally as investors seek to diversify their portfolios and take advantage of its relatively higher yield.
- The Federal Reserve’s hawkish stance may lead to a strengthening of the US dollar, further threatening gold’s dominance.
- The proposal to sell some of the Fed’s gold to accumulate Bitcoin may gain traction, leading to a significant shift in the global gold market.
As the crypto space continues to evolve, it will be interesting to see how Trump’s focus on Bitcoin affects the gold market and the overall investment landscape.
