The Impact Cryptocurrency Have Had On The Gold & Silver Market

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The traditional asset which for years has been used as hedge are often the gold and silver which has often been used as a standard and hedge against inflation especially gold long before the creation of cryptocurrency and it's blockchain technology but then after the introduction of cryptocurrency into the financial market it seems that something happened or it had impacted these two markets.

Ofcourse when we talk about the cryptocurrency market impacting the gold and silver market it makes us wonder how so?

Well in my article today I will be discussing about how or the notable impacts cryptocurrency have had on the gold and silver market thus far because indeed cryptocurrency is an emerging markets though considerably younger than this two that's the gold and silver market but yet ever since the inception of the first cryptocurrency Bitcoin and then it's rise to prominence and the emergence of other cryptocurrency asset it has actually impacted the gold and silver market.

So below are some of the significant impact I believe the cryptocurrency market have had on gold and silver market.

Cryptocurrency has had a significant impact on the gold and silver markets in various ways:

Significant impact of Bitcoin on gold and silver market

Before now when there is often inflations the number one go-to asset as a hedge for many always seems gold and silver, these two seems the standard and they are like a refuge to many In times of high economic uncertainty or instability and they want the value of their money to maintain its value over time so they invest into these strong traditional asset.

But then with the rise of Bitcoin especially the top cryptocurrency these ofcourse doesn't mean gold isn't still viewed as a store of value but the impact is that with the emergence of Bitcoin the concentration of the masses are no longer purely on gold and silver and they now view Bitcoin as also being able to provide the same hedge this traditional assets provides and this ofcourse reduces the amount of funds that was ordinarily supposed to go into gold and silver and investors now have to choose between gold or Bitcoin to provide hedge for them and indeed Bitcoin has provided users with an alternative investment choice other than gold and silver.

Also many may say cryptocurrency market is really a volatile and highly speculative market but that has indeed worked to benefit it in this regard and further impacted the traditional asset like gold and silver. How so?

True due to the highly volatile nature of cryptocurrency it drives many away from the cryptocurrency market but then again there are many people in this space who loves the thrill the volatile nature of cryptocurrency gives and there are some investors who aren't looking for long terms and they wished they are able to be able to salvage something in as little time as possible and that is not really possible with gold and silver as it is with cryptocurrency which is considerably more volatile than gold this then makes investors with this mindset to prefer cryptocurrency investment over that of these traditional asset and this further impact the gold and silver market as the shift reduces the inflow of funds into gold and silver that they would ordinarily be getting where they the only option available.

Normally the primary purpose of this traditional asset is the fact that is viewed as a hedge really against inflations so it's rather a stable asset and ofcourse people who wants stability tend to run to them in times of high instability in the economy of a nation out of fear of their money sharply losing its value as gold over the years has become the standard by which value is measured.

But then there comes Bitcoin and today many seeing Bitcoin for it's value and being built on a wonderful technology like blockchain being secured and decentralized and offering equal opportunity to all plus the fact there will only be 21 million Bitcoin ever that's to say it's supply is fixed and it continues to halve with increase in demand this core values makes people view Bitcoin also as a good and wise choice to hedge against inflation which means that most of the money that was supposed to be going into gold and silver are actually going into Bitcoin and the cryptocurrency market as it is seen to have the same value these precious metals provides whilst offering other benefits.

We have what is known as liquidity in the market, there are many people who ordinarily wouldn't invest in the financial market had it been just precious metals or gold and silver as they don't fancy it especially some look at it for something for the rich but that is where cryptocurrency comes in.

Cryptocurrency bridges the gap between the rich and poor and tries to create equal investment opportunity for all class but the rich and poor and because of the allure that comes with it this makes it all the more appealing to the general masses and makes people who don't have much to still invest the little they have and this help to further generate much needed liquidity in the financial market and often people have come to question why they would even invest in gold and silver with the presence of cryptocurrency which not only offers hedging but much higher return on investment and also could be used as currency which further reduces the inflow of money into the gold market.

So in these ways I believe cryptocurrency has really impacted the gold and silver market.

Conclusion

Well cryptocurrency has actually redefine things as we know it today and this is especially true for Bitcoin which has helped bring a whole lot of people into the markets in general and changed many people's life in a way that would be impossible for gold and silver even as they fall sharply behind, so no doubt all indications points to the fact cryptocurrency is the future.