Dubbed "digital gold", why is Bitcoin still headed down when physical gold is peaking?

  For years now, Bitcoin believers have always viewed the cryptocurrency as a kind of digital gold. That is, its value as well as its anonymity can help withstand economic events such as hyperinflation, political events such as war or sanctions, asset control.

There is rarely a time in the history of the world when such a series of events have occurred at the same time this year. High prices of oil and basic commodities are causing inflation in the US and many other economies around the world to skyrocket.

The escalating tension between Ukraine and Russia shows no sign of ending anytime soon. The United States and many of its allies are imposing a series of sanctions against Russia and many of its billionaires.

A number of factors have converged in this moment and it should have been Bitcoin's time to fly high and prove its role as digital gold. But reality is telling a different story.

Despite the weak forecasts about the future of the world economy, the price of Bitcoin continues to go down. In the past month, the Bitcoin price has dropped by 10%. Ether, the world's second largest cryptocurrency, is down 15% in the same period.

On the contrary, the physical gold price is continuously finding new highs and there is no sign that this trend will change in the near future. This happens even if Bitcoin is still being used. In Canada, some drivers protested after being threatened with freezing bank accounts that had been donated in cryptocurrency. Ukraine even raised nearly $100 million in crypto.

Many also believe that Russian billionaires can transfer their assets to Bitcoin or cryptocurrencies to avoid sanctions. But despite the above opportunities, Bitcoin and the crypto world are still standing still, the price is still on the decline and the trading volume is not much changed.

Most interesting is the statement from Mr. Alex Bornyakov, Deputy Minister of Digital Transformation of Ukraine. Bornyakov and his team had to work day and night to receive tens of millions of dollars in donations in Bitcoin, Ether and other cryptocurrencies from around the world and use them to buy military equipment.

One possibility could be that cryptocurrencies are still too confusing and unwieldy for the average person to use, especially in times of conflict. In Ukraine, for example, many areas have lost internet connectivity, and even the country's elite have difficulty converting their assets to cryptocurrencies.

Another explanation comes from Sam Bankman-Fried, CEO of crypto exchange FTX. Although he thinks that Bitcoin will "perform better" in an unstable economic and political environment, he guesses that the current drop in Bitcoin price is due to the negative information about the digital currency often present on the market. the media.