“These characteristics underpin gold’s role as a traditional financial asset”

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Gold rose 13% last year, while bitcoin climbed 13-fold at the end of the year.

The council said that while cryptocurrencies could become an integral part of the financial system, they are very different from the yellow metal.

He noted that gold is less volatile, has a more liquid market and trades within an established regulatory framework.

The yellow metal also has a well understood role in investment portfolios and has little overlap with cryptocurrencies on many sources of demand and supply.

“These characteristics underpin gold’s role as a traditional financial asset that will likely continue to resonate in today’s digital world,” the board said.

He admitted that the gold and bitcoin supply profile had some similarities in that the future decreasing growth rate and the ultimate finite quantity of the latter was attractive, as was the scarcity of gold and the growth. marginal annual of about 3,200 tonnes of gold mined per year.

The World Gold Council pointed out that there was no quantifiable evidence that gold holdings had been affected by competition from cryptocurrencies.

“Overall, the level of the price of gold in 2017 appears to be consistent with the drivers of recent years and shows no signs of suffering from crypto competition,” he said.

The council also said there was competition within the cryptocurrency space, with over 1,400 cryptocurrencies available and possible devastating effects to come from new technologies for the value and supply of. one of the cryptocurrencies.

In fact, cryptocurrencies could also be seen as complementary to gold, the WGC said.

Various gold players were studying blockchain technology “in the context of turning gold into a” digital asset, “tracking the provenance of gold throughout the supply chain and introducing efficiencies into post-trade settlement processes “.

The World Gold Council has said that cryptocurrencies are not a substitute for gold.

“Gold is an effective and proven investment tool in wallets… the performance of cryptocurrencies was, until recently, remarkable, but its purpose as an investment seems quite different from that of gold.

“Cryptocurrencies have yet to be tested in multiple markets… Its pricing behavior at this point, while remaining attractive to many investors, appears to be driven by high return expectations.”


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