It is no coincidence that some analysts compare Bitcoin to gold . The reason - the lack of intrinsic value and movement entirely determined by the supply and demand of the asset. Neither Bitcoin nor gold offer any return in the form of interest or dividends .
When you invest in a particular asset, you are actually doing so on a foundation basis, based on prospects for increasing the value of the asset, based on sound logic and financial ratios. In other words - based on a fundamental analysis.
However, how can you make a fundamental analysis of an asset that has no intrinsic value? The answer is no way. Therefore, one of the most popular investors of our time Warren Buffett , who is a supporter of investment in value, does not like gold, does not like cryptocurrencies
However, the situation with cryptocurrencies is more complicated. First, they do not correlate with any other financial asset. In comparison, gold is correlated with the movement of the dollar and often with the mood of the stock markets.
These are some of the reasons why many analysts recommend trading Bitcoin and other cryptocurrencies, but not long-term binding to cryptocurrency positions. In other words, it may be better to practice short-term Bitcoin trading than long-term investments in Bitcoin and other cryptocurrencies.
However, technical analysts adore cryptocurrencies. The reason is that technical analysis is one of the few types of analysis you can apply to Bitcoin and other digital currencies