By Solomon Odunayo
Coinbase, one of the largest cryptocurrency exchanges based in the United States, has published a report that argues that the disruptions during the coronavirus pandemic showcase the fact that Bitcoin (BTC), the first and largest cryptocurrency, is superior to the precious metal, Gold.
In the report, Coinbase argues that Bitcoin (BTC) offers a significant advantage over Gold. The exchange claimed that the lack of dependence on physical supply placed the cryptocurrency in this distinct position.
Comparably, the exchange says “Bitcoin and gold are fundamentally similar as scarce and globally accessible units of value”, however, there was a squeeze in the Gold’s recent supply, which was as a result of the coronavirus pandemic. This the exchange claimed to prove that Bitcoin is far superior in terms of global accessibility.
COVID-19 makes It Obvious than Bitcoin (BTC) is Superior to Gold
The cryptocurrency exchange, Coinbase, argues further that “Bitcoin does not rely on fragile physical supply chains and is truly globally accessible.”
The exchange stresses the gaps recently showcased by Gold markets across the world, as disruption to supply chains, resulting in notable levels of scarcity across various markets.
According to the report, there was a relatively 4.5% divergence in the price of Gold in New York and London. This divergence reportedly came from a lack of Gold bars meant for the settlement of Comex’s futures contracts.
The Impact of Coronavirus on Bitcoin (BTC) and Gold Mining
The report further compared the impact of the coronavirus pandemic on Bitcoin (BTC) and Gold mining. It stated that “gold refineries, miners, and supply chains have been disrupted, Bitcoin’s core protocol continues to function as designed”, while Bitcoin’s hash rate is closer to recording new all-time highs, due to the miners’ uninterrupted activities.
The report also stated that “Bitcoin will be approximately as scarce as gold”, but possesses the significant quality of teleportability.
“Bitcoin’s rate of new supply is ~3.6% per year and will soon drop to ~1.7% on May 12th, setting it on par with gold’s historic scarcity. As gold miners and refineries have gone offline, Bitcoin’s global mining ecosystem seems resilient according to hash rate measurements in recent days,” the report added.