The rise of cryptocurrencies and, especially, bitcoin, has placed cryptocurrencies at the center of the debate. According to some analysts, these investment assets not only rival gold when it comes to attracting investor attention, but may even displace it as the quintessential refuge asset in times of crisis. However, authoritative voices such as those of the governors of the central banks continue to bet on physical gold and are wary of virtual assets.
To put this debate that has been created in the media between gold and bitcoin into context, it is necessary to analyze one of the most important sectors of demand for the precious metal: central banks.
According to the latest data published in the Gold Demand Trends report for the second quarter of the year, prepared by the World Gold Council , central banks acquired a net figure of 333 tons of gold in the first half of 2021 , an amount that exceeds by a 39% to the average of the first semester of the last five years , and 29% to the average of the last ten years .
Only in the second quarter of the year, the figure was 199.9 tons, 214% more than the 63.7 net tons in the January-June 2020 period.
By comparison, sales were much lower, totaling a net amount of 41.5 tonnes in the first half. According to the analysts of the World Gold Council in the mentioned report, “despite the fact that a good part of the recent increase in demand is due to the purchases made by the central banks of Hungary and Thailand, the significant interest of a good number of entities from emerging countries allows us to maintain an optimistic perspective regarding demand in the rest of the year. Even if there is a moderate level of selling, we expect global central banks to remain net buyers for the remainder of 2021. ”
Positive Opinion On Gold
These good prospects for future demand for gold by the central bank sector are also supported by what those responsible for them stated in a recent survey.
According to the results of this survey carried out among 26 central banks, the nature of a store of value that gold has, its historic price level and its performance in times of crisis are the main reasons for assessing the presence of the precious metal in its strategic reserves. .
52% of those surveyed affirm that central banks will increase their reserves during the next 12 months, while 21% expect the amount of gold in their reserves to increase during the same period.
Position On Bitcoin
In addition to ruling on physical gold, some governors of the world’s main central banks have made their views clear on cryptocurrencies and their enormous appreciation in recent times.
Common opinion is not very favorable to cryptocurrencies, which are viewed with suspicion by the official sector.
Thus, the governor of the Bank of Sweden , Stefan Ingves , stated, in a conference given at the beginning of this month of September, that “normally , private money ends up collapsing , sooner or later. Sure, someone can get rich trading bitcoin, but it’s comparable to trading postage stamps . “
Ingves himself had pointed out earlier this year that cryptocurrencies would most likely have to come under scrutiny by regulators , after having become an increasingly popular option for investors.
Along these same lines, the governor of the Bank of England , Andrew Bailey , explained last May that cryptocurrencies could plummet to the point of losing all their value: “I fear they lack intrinsic value . I’m sorry, but I’m going to say it bluntly again: if you invest in cryptocurrency, be prepared to lose all your money . ”
For his part, the Governor of the Central Bank of Ireland , Gabriel Makhlouf , pointed out in February that investors who choose to acquire bitcoin should take into account that they may lose everything they have invested: “personally, I would not invest my money in it , but It is clear that there are people who think that it is a good option. 300 years ago, people bought tulips because they thought it was a good investment” (a reference to the tulip bulb market crisis that took place in the Netherlands in 1637).
The president of the US Federal Reserve , Jerome Powell , who commented in February on the growing popularity of these new investment assets, has also expressed himself in this regard : “what people call cryptocurrencies are, in reality, vehicles for speculation . Nobody uses them as a means of payment, like the dollar . ”
Janet Yellen , the US Treasury secretary and predecessor of the current Fed chair, described bitcoin as “ a highly speculative asset , not widely used as a transmission mechanism and an extremely inefficient means of conducting transactions” .