BTSE is the first exchange to launch gold futures whose price is in bitcoin.
These contracts make it possible to speculate on the performance of bitcoin versus gold and to predict the future evolution of the reciprocal prices of these assets.
In fact, instead of seeing the price of one troy ounce of London fine gold in USD, as usual, BTSE users will be able to see it in bitcoin and bet on upward or downward predictions using BTC.
To do so, BTSE uses a gold price index derived from Tether Gold (XAUt), Tether’s ERC20 token which replicates the price of gold, and which can be traded in BTC.
According to the exchange, this initiative is perfectly in line with the evolution of bitcoin itself into a globally recognized asset and continues to gain increasing attention not only as a speculative investment but also as a hedge against inflation.
In particular, the geopolitical, economic and financial events of 2020 have led an increasing number of operators to take note with interest of the level of reliability of gold in the long term, given the still sustained volatility of the financial markets. One of the possible alternatives to gold seems to be precisely bitcoin, chosen by traders and investors looking for new investment opportunities.
In the meantime, the debate continues on whether bitcoin is a reliable store of value, especially when comparing it with gold. An increasing number of financial institutions, central banks and large investors are seeing BTC’s potential to maximize their profits by focusing on the anti-inflationary features of the first cryptocurrency.
BTSE CEO Jonathan Leong said:
“Bitcoin is evolving into a matured store of value. The performance of gold versus Bitcoin fascinates both institutions and retail users, so we are excited to help traders directly trade and speculate on the performance of both assets in comparison with each other by launching a gold index that is priced in BTC”.
For several days in 2020, gold and bitcoin prices showed some degree of correlation, but this was abruptly interrupted by the global financial market crisis in mid-March.
However, after the storm, the prices of the two assets started moving again in a similar way, suggesting that ever more investors are using bitcoin as a possible solution to protect themselves from inflation, similar to how gold has always been used for the same purpose.
Indeed, some major investors have also revealed this openly, showing that this is no longer just a hypothesis, but a trend that is beginning to grow.
Even though only a minority of large investors have actually decided to enter the crypto industry, an increasing number of them are not hiding the fact that they are fascinated by this new asset class.