Gold has a significant name in the global market and is a remaining artefact of our history. The use of Gold as a luxury mineral and the total market value of Gold has a substantial reason. Gold has been purchased to make luxury artefacts or commodities from which they can later profit.
We talk about cryptocurrency, a digital and versatile currency, having highly secure payments and transaction mediums through its blockchain technology. It is mainly known for its property of market price increment, which has been a significant reason for its popularity since its introduction in the mainstream market.
There are reasons cryptocurrency has severely compared to Gold because of similarities in functionalities and properties in the financial market. Check https://bitcoinsup.org/ to get information about digital currency trading. Sometimes, cryptocurrencies are also referred to as Digital Gold.
The Similarities between cryptocurrencies and Gold
To understand the significance of Cryptocurrencies and the title of digital Gold, we must first understand the similarities between Cryptocurrency and Gold in the financial market. As we know, Gold and cryptocurrencies are versatile in the trade market, meaning the market price of both the commodities experiences drastic market price fluctuation, making them ideal commodities for investors and traders.
Another factor is the market price. Despite being a virtual currency, cryptocurrency has a significantly high market value and a vast market net worth compared to valuable and luxury assets like diamonds, rubies, and, you know, Gold. Some digital currencies are even worth more than these luxury assets, commending them the title of cryptocurrencies.
Another similarity between cryptocurrencies and gold assets is coined in trades. Both Cryptocurrency and Gold were used and circulated in the global market in currencies. Gold bricks are part of a nation’s gold reserves and are confidential, only used for the nation’s interest. The use of coins or tokens helps in an affordable and efficient medium of trade, making them valuable in the financial market.
The Independency from any Currency Source
Another unique property of Cryptocurrencies that made them more of a luxury currency than something similar to fiat currencies is their independence in the market. While commodities like Gold, cubies, or diamonds are considered a luxury, there is still a level of prediction and manipulation in their market prices. But their price value is still independent of the value of currencies.
Like those, cryptocurrencies are independent of the influence of any other currencies, and digital currencies of them are dependent on demand in the market. But, unlike fiat currencies, they are also immune to any economic affairs or financial disturbance, which are dependent on their economic states and their national conditions.
There is also the concept of rarity. Why do you think Gold or diamonds are so expensive? They are a rarity in their volume and a limited supply of these rare materials in the market. Like Gold, Cryptocurrencies also had a limit cap to how many crypto coins or tokens they could generate.
Cryptocurrencies like Bitcoin and Ethereum have a limited amount of their tokens circulating in the market. Because of this, they have a higher demand in the market and thus a higher market price. For instance, bitcoin has a current value of approx. $42,000 is sustainably higher than any other luxury commodities because they are just virtual currencies.
Cryptocurrencies and luxury commodities have more features than fiat currencies because of their functionality in the market. Unlike fiat currencies that have a different exchange in different regions at different intervals, Cryptocurrencies and luxury commodities like Gold have roughly the same market price throughout a period because of their international circulation and global demands and uses.
Cryptocurrencies and Gold in the form of assets share many similarities in market functionalities, global demands, independence from fiat currencies, the similar use of coins or tokens, and most importantly, the value and significance in the global market. This similarity grants cryptocurrencies the title of Gold, but virtual, a Digital Gold.