- eToro registers spikes of Bitcoin trading volumes.
- The digital asset has formed a strong correlation with gold.
The ongoing trading conflict between the USA and China has created a strong inflow of capital into Bitcoin, according to the statistical data provided by eToro analysts.
The experts of the online broker registered a 284% growth in BTC trades between May 19 and August 19, as compared to the similar period in 2019. Meanwhile, gold - a traditional safe-haven asset rose only by 73% over the same timeframe.
eToro analysts noticed that cryptocurrency trading volumes grew dramatically after a certain turning point in the trade war. Namely, the number of new Bitcoin (BTC) positions on eToro's trading platform surged by 139% on May 13, after China retaliated against the US’s decision to hike tariffs. The similar momentum was noticed on June 25 and August 13, amid growing tensions.
"Bitcoin, by comparison, shares similar characteristics to gold in that there will only ever be a finite amount in existence (21 million), it's decentralized, its price is not affected by inflation, and it has the added benefit over gold of lower storage costs,” Simon Peters, analyst at eToro, explained in the interview with the Markets Insider.
Bitcoin shares some features of gold, like scarcity; apart from that, its intrinsic deflationary nature makes it resistant to central banks' interest rate decisions. As a consequence, both the precious metal and digital asset are regarded as a haven for investors during economic and political turmoil.
Bitcoin is vulnerable to hacks and allegations of price manipulation, Peters added. However, the correlation with gold may signal that Bitcoin is slowly shifting towards the lower-risk store of value asset.
At the time of writing, BTC/USD is changing hands at $10,350, off the intraday high of $10,665.
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