World Gold Council (WGC), the market development organization for the gold industry is among the biggest voices in the world when it comes to international matters related to gold’s value as well as price. The organization has now made a formal comment on cryptocurrencies, stating that cryptocurrencies are not a substitute for gold in their opinion. 

In a report published by the World Gold Council, the organization stated that gold is ‘very different’ from cryptocurrencies. They highlighted the key differences between the two, stating that while gold is relatively price-stable, cryptocurrencies are too volatile. The WGC further added that the price of gold has appreciated by 10% on a year-on-year basis since the 1970s, Bitcoin has gone through way too many fluctuations.

(Recommended Reading: Can Bitcoin Challenge the Authority of the ‘Gold Standard’?)

The price of gold became has been appreciating since 1970s as that was the year the Bretton Woods monetary system ended. This was the system where the price of currencies was backed by gold. The WGC also pointed out that over the past four years, the volatility in gold prices has also reduced significantly. 

Moreover, the WGC also commented on the liquidity and demand for gold as compared to cryptocurrencies. The organization said that there is a high trading volume in the gold industry as opposed to the cryptocurrency markets. Close to $250 Billion worth of gold gets traded across the world every day - while the number is just $2 Billion for cryptocurrencies. Furthermore, the WGC pointed out that the arrival of cryptocurrencies hasn’t really affected the demand for gold. 

World Gold Council also pointed out that cryptocurrencies seem to be competing with each other rather than competing with Gold. He added that there are over a thousand cryptocurrencies in the markets and hence the competition is high among these currencies. 

World Gold Council Praises Bitcoin’s Performance and Blockchain Tech

However, on an interesting note, the WGC commended the performance of Bitcoin and called it impressive. The council stated:

[Bitcoin’s] performance has, until recently, been remarkable, but its purpose as an investment seems quite different from gold. Cryptocurrencies have yet to be tested in multiple markets.

While the World Gold Council dismissed cryptocurrencies as a competition to gold, they praised the blockchain technology. The WGC said that blockchain technology is ‘genuinely innovative’ and can be used for improving financial services as well as the gold industry! Stay tuned with us at Cryptoground for more updates and news stories from the world of cryptocurrencies and the blockchain technology.