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The CEO of Bitstamp USA, Bobby Zagotta, has stated that Bitcoin (BTC/USD) trading could soon become like gold trading if there is an increase in mainstream adoption. Bitcoin has gained the term “digital gold” over the years, with many stating that it can surpass gold as a store of value.
Bitcoin could start trading like gold
Since the beginning of this year, Bitcoin and other cryptocurrencies, in general, have been on a steep downtrend. The market volatility has spiked due to a wide range of factors, such as the Russia-Ukraine crisis and the expected increase of interest rates by the US Federal Reserve.
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In an interview with CNBC, Zagotta noted that investors were less willing to take risks due to the uncertainty of the global financial markets. He noted that on Bitstamp, there was a rise in the stablecoins held compared to a year before.
The executive further noted that Bitcoin’s failure to withstand the global financial market plunge was caused by an increased correlation between Bitcoin’s price and the stock market. Moreover, Bitcoin is largely used as a speculative asset; hence investors were taking out their investments to reduce the risk of loss on their open positions.
He further noted that if Bitcoin could gain a higher level of mainstream adoption, it could start playing the same role as gold. However, for Bitcoin to achieve a higher level of adoption, regulatory clarity was needed to boost a large-scale adoption.
Bitcoin vs gold debate
Bitcoin vs gold has been a tense debate over the years. Bitcoin supporters have often claimed that the coin is a better alternative to gold as a store of value, given the price growth it has witnessed over the past few years. Bitcoin and gold have similarities, such as having a limited supply.
However, during the recent Russia-Ukraine crisis, Bitcoin failed to live up to this reputation, and instead, it plummeted as gold made a price gain. However, there has been an increase in the institutions investing in Bitcoin during the past year. This has made the asset perform similarly to Nasdaq and S&P 500.