The bitcoin price has surged about 300 percent over the last 12 months thanks to mainstream adoption and institutional interest. It has rallied massively to surpassing all-time highs of $41,000. At the time of this writing, the price is hovering around $35,000 and it will be interesting to watch traders reactions and price behavior for the rest of 2021.

Bitcoins bull cycle will likely continue, especially in the second half of 2021. One of the causes of price increase will be widespread adoption. Currently, relatively few people accept and use Bitcoin in everyday life. However, we could see mainstream acceptance in the coming months. For instance, PayPal has allowed its users to buy and sell bitcoin using PayPal accounts. Also, Square invested $50 million in bitcoin. Ongoing mainstream adoption like this could boost bitcoins price significantly.

The liquidity in bitcoin has been a telltale sign that more institutional bodies are at play. Similarly, throughout 2021 the institutional interest is expected to drive the prices of bitcoin and other cryptocurrencies.

In another sign of the mainstream growth of cryptocurrencies expected in 2021, major cryptocurrency exchange Coinbase is expected to become a publicly-listed company this year. The exchanges institutional assets increased from $6 billion to a whopping $20 billion between April and November of 2020.

Caused by the U.S. dollars cyclical bear market and global liquidity, bitcoin will benefit significantly from people hedging against inflation. Many retail traders will also jump in due to the fear of missing out (FOMO), pushing the price further. Traders who will not want to invest directly in bitcoin will trade contracts for difference (CFDs) on bitcoin via forex brokers and trading platforms.

As mentioned above, in October 2020, PayPal announced that it would support buying and selling cryptocurrency. Also, other Institutions and Wall Street giants have shown interest in cryptocurrency. For instance, JPMorgan Chase & Co. and Citibank are predicting a bullish bitcoin market. According to a leaked report from Citibank, the analysts refer to bitcoin as 21st century gold predicting that it could hit $318,000 by the end of 2021. Likewise, Will Woo, a former partner at Adaptive Capital, has referred to $200,000 as a conservative price.

A note to institutional clients from Tom Fitzpatrick, the global head of CITIFX, leaked on Twitter. The note showed a chart of three bitcoin bulls in the last decade. He suggested that the bitcoin rally could hit a peak of $318,000 in December 2021. However, other analysts such as BTIG and Bloomberg have been more conservative, predicting the price will reach $50,000.

Fiscal policy and monetary policies aiming to devalue currency will work in favor of the bitcoin price. Much of the demand will come from investors who fear that the money printing will devalue conventional money. With fiat money growing out of control, bitcoin is seen as a fixed asset, just like gold.

Besides a weak monetary policy, the dollar could also be affected massively by the COVID-19 vaccine rollout. For these reasons, the demand for bitcoin might increase significantly.

While cryptocurrency proponents are exuberant, there is a possibility that bitcoin prices wont rise beyond the all-time high set in 2020. In fact, the price may fall back and remain below this mark for some time, as was the case during the 2017 rally. Some believe that the only time bitcoin is likely to reach another significant high is in 2024, following the next mining subsidy halving.

Bitcoins popularity as digital gold is spreading fast. However, unlike gold, bitcoin is experiencing its first global crisis, caused by COVID-19, as it was born in 2009 following the 2008 financial recession. The 2020 bear run in the market saw investors sell equities for cash. Even gold, which is considered by many to be a safer investment than bitcoin, dipped in March. Bitcoin crashed hard in mid-March too, but the bitcoin case was different. The cryptocurrency bounced from the bottom a month later in a bull run that continued until the end of the year.

Regulators have been scrutinizing digital currencies for years. Some people, albeit only a few, are using cryptocurrencies to engage in illegal trades and with the surging value of cryptocurrencies, governments around the world will be looking closely at the market. For instance, a lawsuit by the U.S. Securities and Exchange Commission (SEC) against altcoin project Ripple saw XRP prices fall by almost half.

Regulatory agencies could suddenly erect a hurdle to tame unscrupulous activities surrounding bitcoin, but this regulation couldnt affect bitcoins bullish run significantly.

Transactions involving different fiat currencies can take days and involve heavy fees and a global digital currency could significantly streamline this process in 2021. While bitcoin adoption is growing, the cryptocurrency could face competition to solve this problem from big tech. A good example is Facebooks digital currency and, while Facebook diem is quite different from Bitcoin, it may draw some attention away from bitcoin in 2021.

Likewise, central banks are also competing against bitcoin. As reported by Banks for International Settlements, 80 percent of central banks are on the verge of developing some form of digital currency. For instance, China is working toward the adoption of a digital yuan. In many critical ways, these central bank digital currencies will be vastly different than bitcoin.

In general, the adaptation of bitcoin in commerce is a perfect cause for price increases in 2021. While bitcoins price and adoption is expected to proliferate, we cant rule out the opposite and volatility is certainly possible.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Bitcoin Investment In 2021: What Should We Expect? - Bitcoin Magazine

Seven compelling factors that are driving Bitcoin higher.

Let the business resources in our guide inspire you and help you achieve your goals in 2021.

February1, 20216 min read

As technical as cryptocurrency and Bitcoin (BTC) markets are there are some fundamentals driving the market. These include cryptocurrencys growing mainstream acceptance, the amount of power put into mining the coin, and its availability to name a few. Now that BTC/USD is trading at new all-time highs the market can expect the bullish trends to continue because there isnt much reason for the market to reverse until a clear top is formed. Based on what were seeing inthe marketBTC/USD could easily hit the $59,000 this year and that estimate might be too low.

Related:How a Series of Elon Musk Tweets Helped Lead Investors to Dogecoin, a Meme-Inspired Cryptocurrency Worth 4 Cents

1. There is a cost to mine Bitcoin

While mining Bitcoin used to be very easy, an influx of miners (along with other factors discussed below) drove up the difficulty rate while driving down the reward. Now it is virtually impossible for a lone operator to mine a single BTC without the help of either 1) a vast quantity of expensive mining resources or 2) the aid of a mining pool. The mining pools tend to operate where electricity is cheap but there is still cost, not to mention the overhead of running a large mining operation. The latest estimates put the cost of 40 TH/s of computing power at $4.32 per day. Thats may seem small but it adds up over the year. The annual cost runs about $1,576 with an expected reward of 0.08875 Bitcoins or about $3,017 with BTC trading at $34,000. Thats a gross margin of 47% and then add in the cost of buying or renting a unit. The takeaway, it costs money to mine Bitcoin and that is where a lot of its intrinsic value lay.

2. There is not an unlimited supply

Bitcoins value is also driven in large part by supply, and the supply is dwindling. There are only ever going to be 21 million real BTCs ever minted. That doesnt count wrapped BTC or other kinds of defi-sourced BTC which ultimately will also affect BTCs price. But, back to the supply, of the 21 million nearly 90% have already been mined leaving just over 2 million for the mining community to split up. And, not only that, but there are the halvings to consider. A halving is when the Bitcoin mining reward is cut in half. The purpose of this is to help control BTC inflation and extend the lifespan of the mineable BTC pool. The halving occurs every four years, there have been three so far, and the most recent was just this past year. The takeaway here, people who want to own a Bitcoin or use a Bitcoin have to buy one of the few that are already out there.

3. There are a growing number of BTC addresses

Technically, the way that the BTC network is set up, there are already an infinite # of addresses. The system is set up that way to help make it more difficult to find a specific address and hack into it. The more important figure, however, is the number of Bitcoin wallets that currently hold BTC >0. That figure posted a YOY increase in 2020 that has the total number of wallets in use at over 1 million. That doesnt sound like a lot but you have to remember that supply is limited and the number of large holders and whales is rising by mid-single-digits. The number of whales, BTC holders with over 1000 BTC in their account rose by 7% while smaller accounts with 5 to 100 BTCs rose by 4%. In total, BTC whales are holding nearly 2.3 million BTCs while smaller investors account for upward of 10 million BTC. Thats not a lot left for the truly small retail investors who are also flooding into this market.

4. The mining community is still growing

If Bitcoin wasnt an attractive and lucrative investment the mining community would not be growing and it is growing. The latest data shows hashing power or the amount of computing power attributed to the BTC network at a new all-time high. The takeaway here is that Bitcoins hashing power has only risen over the long-term and is likely to continue setting new highs long into the future. Thats a lot of competition for a dwindling supply of coins.

5. Bitcoin is the worlds reserve cryptocurrency

Bitcoin has long been the worlds reserve cryptocurrency because its the easiest to use, themost widespread, the first that most new users buy, and its role in defi. The proof of this is in the coins market dominance of its percentage of the total cryptocurrency market cap. Except for a brief period during 2017 and 2018 when the Altcoin craze was going on Bitcoin has always commanded at least 50% of the total market cap. Lately, that has risen to over 60% where it has trended since mid-2019. The takeaway here is that when the world turns to crypto Bitcoin is the first name they seek. And the world is warming up to crypto.

6. Bitcoins get lost, locked, and burned every day

As if the limited and dwindling supply was not enough to support BTCs price movement there is the lost BTCs to consider. The estimates vary but investors should assume that roughly 3.7 million BTCs are already lost or irrecoverable. One analyst estimates that 1,500 BTCs are lost every day. What lost means is that they are in unrecoverable wallets. We know where they are on the blockchain but no one can get to them for 1 of 2 reasons. The first is that they are really lost due to password protection and/or lost devices. Those coins will never come back to the market. The second is burning. Some operations on blockchains require you to lock or burn coins. This essentially loses coins on purpose but in a way that spawns new value. For example, if we wanted to launch our own cryptocurrency we could burn $1 million worth of BTC and produce 1 million $1 MarketBeat Coins.

7. Defi is growing

Defi isdecentralized financewhich, in a nutshell, means locking BTC or another cryptocurrency into a smart-contract. The total value of defi grew at an exponential pace in 2020 and now amounts to over $27 billion in value. Thats not all BTC value but BTC is well-represented. The takeaway here is that defi is growing and will continue to suck up BTC value and drive demand for BTC.

After a strong rally from the 2020 lowws the Bitcoin market is very bullish. BTC is likely to move sharply higher over the next year and basied on the recent move, it could run close to 100%. Assuming the recent consolidation at all-time-high levels will lead to a continuation we project at least $27,000 in upside from the $32,000 level.

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This Is Why Bitcoin Will Hit $59,000 In 2021 - Entrepreneur

Bitcoins Taproot upgrade is (basically) a shoe-in as Bitcoin stakeholders figure out the best way to bring it online.

Digital signatures are created from the private keys that control bitcoin wallets and are required to approve transactions. Taproot addresses will use Schnorr signatures, rather than Bitcoins current signature algorithm, the elliptic curve digital signature algorithm, or ECDSA for short.

In terms of data and processing, Schnorr signatures are smaller and faster than ECDSA signatures and also have the added benefit of being linear, which means Schnorr-based smart contracts can be optimized for functions that ECDSA signatures cannot.

These differences have made Taproot a highly anticipated upgrade because it will give Bitcoin a boost to transaction privacy and allow for more lightweight and complex smart contracts (an encoded contract with self-executing rules).

The tooling and coding improvements Taproot brings will be largely under the hood and will be a boon to developers. Regular Bitcoin users, however, will also benefit from usability, performance, and privacy improvements to multisignature (multisig) technology, privacy software and even scaling tech like the Lightning Network.

Without Taproot, applying the following upgrades to these softwares would either not be possible or not be as viable.

MuSig2: Boosting privacy and efficiency of multisig transactions

Bitcoin development hub Blockstream is developing a new multisig software, MuSig2, which will make multisig transactions more efficient, cheaper and more private.

Unlike usual Bitcoin wallets, which only require a single signature from a private key, multisig wallets require at least two or more signatures from different private keys to approve a transaction. The idea is to distribute the risk of a wallet among multiple keys and, if needed, multiple parties.

Under the current design with ECDSA contracts, multisig transactions record the signature of each multisig participant individually. Schnorr signatures would allow each signature to be recorded as one signature on the blockchain, making the transactions more lightweight in data, and thus cheaper.

[Taproot] benefits multisig wallets such as Blockstream Green because using MuSig2 is cheaper and more private than current multisig setups, Blockstream researcher and applied cryptographer Jonas Nick told CoinDesk.

The Bitcoin upgrade will also raise the limit on signers a multisig wallet allows from 15 to a much higher number, said Bitcoin developer Chris Belcher.

Schnorr-signature based transactions are more private because, thanks to so-called scriptless scripts, all Taproot transactions have the same digital footprint. That means a single signature transaction and a multisig transaction look the same on the blockchain under Taproots rules.

This privacy improvement spills over into other areas of Bitcoins development, too.

MuSig2 also improves efficiency of multi-party contracts such as Lightning Channels, CoinSwaps or discrete log contracts, and improves the privacy of routing in the Lightning Network by enabling scriptless scripts. This also means that the anonymity set of regular transactions would become larger because, for a blockchain observer, it could just as well be part of a multi-party contract or multisig wallet, Nick said.

CoinSwap: Disguising mixed coin transactions

All of the softwares Nick referenced rely on multisig wallets to bind market participants in cryptographically reinforced rules of engagement called smart contracts.

One of these, the privacy protocol CoinSwap, is widely considered to be the best successor to CoinJoin, currently the most popular software for mixing bitcoins to obscure their transaction history.

One shortcoming of CoinSwaps precursors including CoinJoin is such transactions show up as distinctly different from normal ones. This makes it easier for blockchain analysis to pinpoint CoinJoins on-chain, thwarting any privacy benefits.

According to Belcher, Bitcoins Taproot upgrade will fix this problem.

A good benefit of Taproot is also that it allows scriptless scripts. As you may know, protocols like Lightning Network and CoinSwap depend on so-called hash time locked contracts. Currently these contracts are visible on the blockchain. The thing that scriptless scripts allows is for those contracts to also look exactly the same as a Taproot single-sig transaction.

Point Time Lock Contracts: Making Lightning More Private

As Belcher points out, Bitcoins Lightning Network uses hash time locked contracts (HTLCs) to facilitate transactions. But Schnorr Signatures would pave the way for point time lock contracts (PTLCs), an improvement on HTLCs that allow for more private and efficient smart contracts for Lightning.

The privacy gain comes from a modification to how Lightning Network nodes route transactions. Lightning transactions must be sent directly and peer-to-peer on what are called payment channels. Otherwise, lacking this direct connection, payments must be routed through peers to which both the sender and receiver are connected.

Lightning Network nodes route transactions by passing on a hash of the payment to each node on that payments path. PTLCs alter this hash by adding random info at each hop to make the payment less traceable to any party conducting blockchain surveillance.

Additionally, PTLCs will enable more complex smart contract logic to facilitate unprecedented blockchain escrow conditions and to improve oracles. (Since a blockchain cant process data outside of its network, an oracle feeds this data to it.)

Technically, [PTLCs] could be done today with ECDSA but it doesnt have the same proven security, and if it was implemented it would have to be redone once we get Taproot, Ben Carman, a developer at Suredbits, told CoinDesk.

Other Taproot improvements

Carman and his colleagues at Suredbits have been working on discrete log contracts (DLCs), a fairly new smart contract logic for Bitcoin that, while working today, will be more flexible and easier to use when Bitcoins Taproot upgrade kicks in.

Belcher told CoinDesk that Schnorr signatures will also enable batched validation wherein a Bitcoin full node could validate 1,000 Taproot signatures in nearly the same time it takes to validate one [ECDSA] signature. This scaling solution would significantly speed the time it takes a node to verify all signatures in a block.

Additionally, Taproot could use ring signatures to give users the ability to prove they own certain coins without having to reveal the public key associated with those coins.

That means someone could prove that they own a certain coin without revealing which exact coin. For example, it would be possible to prove you own at least 1 BTC (or any amount) by doing a ring signature over all the Taproot [unspent transactions] worth more than 1 BTC, and yet it doesnt actually reveal which is yours, Belcher said.

This has implications particularly for Lightning Network node operators who want to prove payment channel ownership without sacrificing privacy.

More:
How Bitcoins Taproot Upgrade Will Improve Its Software Stack - CoinDesk - Coindesk

One River Asset Managements CEO says his firm now holds bitcoin worth well over $1 billion. He revealed that the institutional interest in bitcoin is astounding, noting that almost all major institutions in the U.S. are having discussions about the cryptocurrency. He believes that bitcoin will be worth more than gold, placing its value at approximately $500K.

The CEO and co-founder of One River Asset Management, Eric Peters, shared his view on bitcoin at length in an interview with Bloomberg last week. Firstly, he revealed that his asset management firm now holds bitcoin well in excess of a billion dollars at this point. He then discussed the case for institutional investors to own cryptocurrencies currently.

We are in a unique period right now, Peters began. It is the period seen many times throughout history where governments become extremely indebted, monetary policy becomes less effective, and ultimately governments need to issue lots of debt and begin actually spending. Typically, when they do that, they try to unburden themselves from the debt theyre incurring by debasing the currency that theyre issuing that debt in. The CEO added that ultimately, those who hold that currency lose their spending power.

He proceeded to talk about crypto assets, stating that they are really interesting in the sense that theyre a new asset class altogether. He noted that they have some unique qualities, part of which resemble the qualities that youd find in gold except that theyre wildly underpriced relative to gold.

Moreover, bitcoin and other cryptocurrencies have technology properties, and will look different tomorrow, and next year, and in a decade to come. This makes bitcoin unique to gold because if gold has looked the same two thousand or two billion years ago, then it will look the same in two thousand and two billion years from now, the One River executive described, elaborating:

I think you have to be a real pessimist to think that an emerging technology platform doesnt become more interesting, more useful, more valuable.

He further detailed that Its very rare that you find an asset that can kind of allow you to capitalize on future upside [the technologies] while also mitigating the downside [monetary debasement] like that.

Peters also clarified that he always starts with the macro aspect when it comes to investing as he has been a macro investor his entire career. With technology, the CEO opined:

Ive seen enough to know that, in essence, tomorrow is going to look better than today. When youre investing, thats incredibly important to know does tomorrow look better, worse, or the same. I think Ive seen enough to just understand that tomorrow looks better than today in these assets.

Were issuing enormous amounts of debt. Were having our central bank buy them the scale of it is just so profound so the question is, in that environment, what are the assets that you can own, he continued.

Peters proceeded to list some plausible investment options: equities, gold, and digital assets. He asserted that digital assets are dramatically undervalued relative to some of these other stores of value, which is why his firm is excited about this, emphasizing that Its just an undervalued asset for that macro backdrop.

The One River CEO also praised bitcoins fixed supply. He stated: Its unlike any asset that Ive seen in the world in the sense that theres no supply response to the price. If bitcoin went up five times in value, or 10 times, or 100 times, there wouldnt be more bitcoin produced. You cant say that about really any other asset in the world.

He also compared bitcoin to gold. I think it will be worth more than gold at some point because gold is not infinite. Gold continues to increase in terms of supply, he noted. In contrast, there will only be 21 million bitcoins. The CEO elaborated:

If it were just to go up to the market cap of all the gold in the world, it would go up to something in the order of $500,000 per bitcoin.

Right now, its trading at lets say $30,000, so if you look at it from a traders perspective theres enormous convexity to the upside, he affirmed.

Answering a question about how long it will take for bitcoin to become more valuable than gold, Peters said that it is policy dependent. He could see it happening in a number of years if we see some type of next recession that is followed by even more issuance and more buying from the fed. Nonetheless, he pointed out that one of the things about these assets is it doesnt cost you anything to hold them. You have the price risk to the downside but you dont have a negative carry.

The One River executive also discussed whether crypto assets will appeal to institutional investors if they continue to exist alongside fiat money or whether institutions need to see some kind of government or central bank acceptance or endorsement before jumping in.

After he publicly revealed that his firm had invested about a billion dollars in bitcoin, he said that the number of institutions that have been filling my day with calls and inquiries about this is astounding. He reiterated that it is already happening enormously.

Peters expects the crypto asset class will mature in a decade from now, adding:

Whats happening is almost every big, credible institution in the U.S. is having discussions about this Many of them are calling us to ask.

Theyre fascinated by this, he further shared, emphasizing that they should be because this is the first and last asset class that will appear in our lifetime.

As for how the crypto landscape, including BTC, will look like a year from now, Peters said, Prices will be higher. While admitting that there will continue to be volatility, he believes that it will decrease the higher the prices are. He explained that as the prices rise, youre drawing in new types of investors, with stronger hands, quite frankly so I think that over the next year, a lot of money will be drawn into these assets.

He also believes that more regulations will come out in an effort to increase transparency for the whole crypto asset class but the regulators will not destroy the asset class because they understand that the future of finance will be digital.

Do you agree with One Rivers CEO about bitcoin? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Asset Manager Values Bitcoin at $500K, Expects BTC to Be Worth More Than Gold, Sees Massive Institutional Interest Markets and Prices - Bitcoin News

Spoileralert: I own both gold and Bitcoin in my portfolio.

As a longtime participant and observer of the shifting currents of monetary policy and financial markets, I believe both can play vital roles as repositories of value, especially in a world plagued by economic and political uncertainty.

But although they share some similarities, there are important differences that persuade me that contrary to growing opinion, bitcoin BTCUSD, +0.83% will not supplant gold GC00, -1.38% as the choice of investors seeking long-term safety.

Admittedly, bitcoin advocates have some momentum on their side, as its price hit a record above $40,500 in early January. After a recent pullback, bitcoin still trades around $30,000. Prominent institutional investors have become bitcoin fans; BlackRock, the worlds largest money manager, called it a durable mechanism that could take the place of gold to a large extent.

Yet, to paraphrase Mark Twain, the reports of golds demise have been greatly exaggerated. Bitcoin is certainly a legitimate asset and has the potential to be a true store of value joining a select group of assets, commodities and currencies that can be saved, retrieved and exchanged without deteriorating in value.

However, gold has at least a 2,500-year head start as a widely-accepted, global medium of exchange and value. Compared to bitcoin, the gold market enjoys great depth and liquidity. The total amount of physical gold held by investors and central banks is an estimated $3.7 trillion. Thats nearly seven times the market capitalization of all bitcoin created. Both gold and bitcoin enjoy highly liquid markets, but golds average daily volume in 2020 was $125.3 billion, or 30 times bitcoins daily spot volume of $4.1 billion.

I own gold for insurance to offset the effects of inflation and as a safe haven to offset any steep losses in other parts of my portfolio. Bitcoins role in my portfolio is that of a speculative asset, rather than to protect wealth. I became interested while I was director of the U.S. Mint and wanted to understand cryptocurrencies, and the best way was to try it. Since leaving government service, I have become an investor in bitcoin.

While both gold and bitcoin can be seen as islands of security in an ocean of financial turbulence, we must understand their similarities and significant differences.

In both cases, their value is supported, in part, by scarcity. Gold is limited by physical supply and the difficulty of extraction, while bitcoin creation is capped at 21 million by its source code. These qualities, as well as the deep, liquid markets I noted earlier, mean that both gold and bitcoin have the potential to retain value, and in fact appreciate, during difficult economic cycles.

And unlike government-made currencies like the U.S. dollar, whose value derived from confidence in the issuing government and laws requiring citizens to accept it, gold and bitcoin have other uses, and the markets generally determine their value.

Gold, however, has an unmatched long-term record as a store of value. Economists have shown that, over the past 50 years, gold more than held its own in times of low inflation and rallied strongly during periods of high inflation. Since bitcoin has only existed since 2009 and its active trading market is even more recent, it is too soon to tell how its value will hold up over time.

The differences between gold and bitcoin are meaningful. For one, bitcoin is volatile, having fallen more than 20% from its Jan. 8 high. Over the same period, gold declined about 3%. This lack of volatility is one reason investors gravitate toward gold.

The run-up in bitcoin over the last year may largely be due to a new class of investors, attracted to a more transparent regulatory environment. Many new bitcoin owners are institutions, including private-equity firms, hedge funds, insurance companies, pension funds and endowments. Once this initial institutional surge of buying normalizes, bitcoins price escalation may not be sustainable.

Another advantage of gold is that one can take physical delivery, while digital currency exists as an electronic ledger entry. Weve heard about the British investor claiming to have accidentally thrown away a hard drive containing a cryptographic key to about $300 million in bitcoin that may now reside in a trash dump in South Wales. Its hard to imagine misplacing that amount of gold coins or bars. By holding physical gold, the investor owns its full value and has no counterparty risk.

Furthermore, despite expectations that Bitcoin would be used for everyday transactions, that degree of wide acceptance has not yet occurred. Bitcoin is more likely to be used as money in countries where there is little confidence in government currency and will take longer to be widely accepted as money in economies where government money is generally trusted, like in the U.S., Japan and across Europe.

While these differences explain why bitcoin wont entirely replace gold, both make sense in a well-managed portfolio. The continuing economic uncertainties wrought by COVID-19, the lower-for-longer interest rate policies of central banks, and the volatility of the highly valued equity market make a strong case for owning assets whose value is not tied to economic vagaries or government policies.

As an investor, why should I have to choose between the two? I think there advantages to owning both.

Edmund C. Moy was the 38th director of the United States Mint and is now chief market strategist at Valaurum, a company that enables investors to buy gold in small, more affordable increments.

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This investor in both gold and bitcoin says only one offers real long-term safety - MarketWatch