Tim Draper: “Bitcoin in the crisis will grow after gold”

Bank of America expects the price of gold to rise to $3,000 in the next year or two.Proponents of bitcoin believe that the "digitalgold ”during a crisis will rise in price.

Due to the economic crisis causeddue to the coronavirus pandemic, Bank of America has revised its forecast for gold and expects its price to rise to $3,000 over the next two years. Bitcoin enthusiasts believe this scenario is also true for “digital gold.”

In the past few weeks, many centralbanks print money and pump it into the economy, thereby trying to revive the markets. As a result, safe-haven assets such as gold are on the rise. The cost of the precious metal has already exceeded $1,700. The last time the gold price was at these levels was 7 years ago.

Venture Capitalist Tim Draperclaims that the limited emission of bitcoin protects it from inflation, which has become an attribute of the monetary system against the backdrop of recent measures by national governments.

“Such a frantic flow of new money into the markets will reducetheir cost. At the same time, the number of bitcoins will always be 21 million. BTC is safe in the sense that no one will dilute it with their political manipulations. Gold is excellent for jewelry and is used in the production of some types of electronics. It is bulky and heavy. You can't just buy a cup of coffee with gold. Therefore, it is much easier to use Bitcoin as a currency,” — Draper said.

Morgan Creek Digital partner Anthony Pompliano believes that under the circumstances, both assets have a chance of success.

“Gold and Bitcoin have reliable monetaryprinciples. The macroeconomic environment suggests that assets with similar characteristics will perform well in emerging from the current liquidity crisis. However, with all this, Bitcoin has greater volatility than gold, which makes it a more attractive asset. I expect Bitcoin to outperform gold,” — Pompliano said.

And yet, unlike bitcoin, gold isa proven means of protection against the depreciation of monetary policy and inflation, especially when it comes to attracting traditional investors. But given the difficulties that have arisen due to the coronavirus pandemic (stopping mining and processing plants, closing delivery routes, etc.), access to the gold market is becoming limited. That is why many investors can begin to turn to alternative investment instruments.

“Bitcoin has all the properties toto act as a store of value for those who cannot easily access gold. For example, these are retail investors who will eventually look for alternatives as their fiat money will depreciate over time. This could likely lead to an increase in the value of Bitcoin, but this will not happen immediately after the reward halving. As with gold, it will take time before quantitative easing and Bitcoin issuance reduction begin to take effect,” — said Quantum Economics analyst Jason Deane.

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