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The link between the cost of gold and digital money came at the end of last year, when Financial Experts began trading in gold with bitcoin. Experts predict the model will continue, despite the current decline in Bitcoin costs. 

Valuable cash is directed to Bitcoin

In a 2017 gold survey published in January, Thomson Reuters researchers found that the rising cost of digital money in December used critical amounts of precious metals. The report found that the risk horizon of retail speculators is now shorter, and many could not resist the compulsion to become strong in the digital currency. 

RBC Capital Markets strategist Christopher Louney said the advance, the potential relationship between gold valuation and digital currency costs, is really overdue, Fortune reports. He said he saw a possible relationship between the valuation of gold and the cost of digital currency. 

Although the relationship was not upfront, Louney said the model was developed in late 2017 and continued into mid-2018, indicating that when the price of bitcoin fell by four digits, speculators may have dumped. Gold to buy cryptographic forms of money. 

Louney, who focused on the context, is small: insufficient to shift the cost of gold and insufficient to argue that financial experts think bitcoin will replace gold. Macroeconomic components, which have usually affected gold costs, continue to dominate operating conditions, such as stock market performance. 

Louney said he expects gold costs to end the year at a lower level than they had started, totaling about $ 1,303 a year, mainly due to appreciation. 

A long way forward

In addition to being unpredictable, Bitcoin is still a generally vague resource compared to other speculative resources. Gold is settled by looking with institutional financial experts and is highly liquid. 

Although Bitcoin trading volumes in daily trading were $ 3 billion late by the day, gold trading volumes reached $ 250 billion daily, as announced by the World Gold Council. 

The Bitcoin gold connection may increase over time, Looney said. The evolving relationship also means that the opposite can happen, which is why Bitcoin speculators exchange their cryptocurrencies for gold in less difficult circumstances into a less volatile resource. 

In a report sent to the bank’s customers in January, Goldman Sachs expert Zach Pandl said the fast rally sought for bitcoin has been triggered by growing disappointment over targeted financial frameworks and the current management of the One account base. 

In the long run, as cryptographic forms of money evolve and move toward a significant resource class, Pandl said computer-based monetary policy standards such as Bitcoin reduce returns but have an abnormal state of stability, similar to gold and other resources.