Jim Wiederhold, S&P Global’s deputy director of commodity and real estate assets, wrote in an opinion article last week that Bitcoin “reminds of the 1800s gold excitement in the United States.” Wiederhold’s remarks were followed by a report saying that Bitcoin has become mainstream.

 

 

The similarity between gold and Bitcoin is striking

In his opinion piece, Wiederhold argued that the enthusiasm surrounding Bitcoin was like the enthusiasm surrounding the gold:

The latest enthusiasm for Bitcoin is reminiscent of the Gold Rush between 1848-1860 in the west of the USA… The US passion for gold exploded during this time.

Analysts added that the parallels between Bitcoin and gold are growing. According to Wiederhold’s words, both assets have the “potential to be excluded from traditional financial markets” while having scarce and good inflation protections.

Moreover, Wiederhold noted that both assets were “unrelated to other popular asset classes” in investors’ portfolios, but the volatility of Bitcoin in the past five years was several times higher than the volatility seen in other asset classes.

Worries about risks alleviate as BTC spreads

In addition, the analyst pointed out that although BTC has a supply cap and concerns about theft disappear as it becomes more common, there are “technology and counterparty risks”.

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Stating that gold is an established asset, but Bitcoin is still in its infancy, the analyst said that “it is gradually becoming more accessible to mainstream investors.” S&P Global also recently published a report on BTC.

The report pointed out that the popularity of Bitcoin is increasing:

Once considered an alternative trend, cryptocurrencies have become mainstream and are likely to stay here.

The report also points out that for companies investing in cryptocurrencies it “may look like a niche or experimental segment”.

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