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 Bitcoin, the asset that has shaken up the financial markets over the past few years, has returned to the limelight in the second half of 2023. Coming off the back of a slow return to form after falling to as low as $16,000, talks of BTC and its effect on the currency and gold markets seem to be reignited. BTC has emerged as digital gold in the eyes of many investors, which has helped popularize the currency further, with institutional ownership also on the rise. High inflation and distrust in central banking have also added wind to Bitcoin’s sails over the years, with the currency firmly above the $40,000 mark as of this writing. However, what does the future hold for Bitcoin and how could it perform against gold and fiat currencies in the coming years? – Let’s discuss. 
 Bitcoin and Gold – What are the Differences?While Bitcoin is generally regarded as a form of digital gold alternative, it is important to note why this may be the case and what fundamental differences exist between the two assets, as well as the possible future price developments. The core similarity between BTC and gold lies in the psychology of investors and the propensity to buy them as safe-haven assets during periods of high inflation. Thomas Bennett of firmfunded.com describes the relationship between Bitcoin and gold as a “tradeoff between convenience and utility towards the same ultimate outcome”. To better understand what this means, we can look at the core differences between BTC and gold:

Therefore, the core differences between BTC and gold lie in practical application, rather than investment rationale.The market has adopted Bitcoin as a digital form of gold, rather than as a direct alternative to fiat currencies, and major institutions, such as BlackRock and Fidelity, are also using their funds to invest in Bitcoin for the long term. 
 Bitcoin and Fiat Currencies – What to Expect?When it comes to blockchain-based alternatives to fiat currencies, such as the USD, EUR, GBP, and more, stablecoins have emerged to take this niche on the crypto market. While Bitcoin is a high-value asset, stablecoins are pegged to the USD and are used as a direct means of exchange, as opposed to a store of value. Therefore, Bitcoin is less of an alternative to fiat currencies and is not broadly expected to perform comparatively to major fiat currencies. 
 Bitcoin Performance OutlookWhile accurately gauging the winner between Bitcoin, gold, and fiat currencies is next to impossible, it must be noted that there may not be direct competition at all.As Bitcoin continues to be accepted by major institutions as a means of long-term investments, its utility on the markets can firmly shift into the digital commodity territory, rather than the currency market.This means that it is highly likely that Bitcoin will continue to be viewed as digital gold and not necessarily a direct alternative to USD, EUR, etc. However, another key point to consider is that the market sentiment is much more bullish towards BTC and gold, ratchet than fiat currencies, as inflationary pressures have swayed even the most conservative investors towards gold and Bitcoin as long-term stores of value. Therefore, we could ascertain that the prices of BTC and gold are to continue rising, all else being equal. This rise can be attributed more so to the distrust towards the modern monetary system, than anything else. A further boost to BTC’s future prospects has been the SEC’s decision to authorize Bitcoin ETFs, which allows investors to trade ETFs that directly own Bitcoin, as opposed to derivatives. This wider acceptance is likely to help Bitcoin regain more lost ground since falling from its 2021 All-time highs. More By This Author:Altcoins On The Rise: Forecasting Prices For Emerging Cryptocurrencies
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