Bitcoin And Gold Are Money, While Fiat Is Currency

Considering the present-day market situation, many traditionalists are seeking investments which can provide high returns. Bitcoin (BTC), gold and fiat are often discussed; and when it comes to Bitcoin and crypto in general, the first question is: “Which coin to invest in?”

In the latest podcast investor and Bitcoin proponent Mike Maloney maintained that selecting right cryptocurrencies for investing is a crucial priority.

He stressed that Bitcoin, Bitcoin Cash (BCH), Ethereum (ETH) and a number of other top-15 coins were the only ones to withstand the storm. “All other cryptos will go down to zero”, he added.

Bitcoin-Ether-Altcoin dominance. Source: coincodex

The chart above analyzes the dominance of Bitcoin, Ether, and other altcoins. While BTC has a dominance of 64.5%, ETH has a dominance of 14.23% and all other altcoins together record a dominance of 27.3%.

Another important factor to consider before investing in Bitcoin is the correlation factor, which involves BTC’s correlation with traditional stock assets as well as other altcoins. The recent market crash showed that Bitcoin had failed to act as a “safe haven” and “store of value”, however, some analysts suggest that it is not completely true, as we can not make judgments based on Bitcoin’s short-term movement. Maloney also noted that Bitcoin was not large enough to offer the financial shelter people seek at the moment.

The Bitcoin-Gold realized correlation presented above indicates that the correlation which reached 55.8% on March 13 fell down to 25.3% on March 16 and has been rising since then. Similarly, Bitcoin-S&P500 realized correlation chart below suggests that the correlation rises.

Maloney further discussed Bitcoin and gold, stating that both assets were “money”, while fiat was just “currency”. He added that money, along with being a medium of exchange carried value, unlike currency. He said:

“Fiat currencies by their very design cannot store value over long periods of time it’s a pyramid scheme scam where they always have to create new currency.”