Recently, I saw such a view that "BTC is both a risk asset and a safe-haven asset". This view can actually be extended to all digital currencies, "digital currency is both a risk asset and a safe-haven asset."

These two seemingly contradictory statements are actually viewed from different time periods.

1. Digital currency is a risky asset in the short term

We all know that digital currencies are extremely volatile. It can be said that among all investment categories, the price fluctuations of digital currencies are the largest. On a daily basis, their price fluctuations can often reach ten percent or even tens of percent.

therefore

thereforeFrom this point of view, digital currency is a risky asset: users have to bear short-term price fluctuations after buying, and cannot maintain price stability.

The emergence of a large number of stablecoins anchored to the US dollar also reflects this risk of digital currency from another aspect.

2. Digital currency is a safe-haven asset in the long run

But when we compare digital currency with other investment products, the overall market value of digital currency (1.8 trillion) is still very small, not even a fraction of the value of my country's A stock market (43 trillion). thereforeIn the long run, this market still has great room for growth. More importantly, traditional institutional investors and funds have not yet entered this market on a large scale.

In addition, due to its decentralized characteristics, digital currency, like gold and silver, is not endorsed by any credit, and has a strong ability to resist risks technically, so it is considered "digital gold" by the industry and is a risk-resistant safe-haven asset.

3. In the long run, which one has more room for digital currency, gold and PAXG

Paxos Trust, the issuer of the stablecoin PAX, recently launched a new digital currency, PAXG. Holders of PAXG can exchange it for physical gold (the exchange rate is 1 PAXG for an ounce of gold in a London vault), or they can trade this digital currency on exchanges.

On the one hand, PAXG solves the inconvenience of gold trading, and on the other hand, it also enables the public to obtain gold through convenient channels.

So, compared with investing in gold or PAXG products anchored in gold at this stage and investing in digital currencies in the usual sense, which one has more potential in the long run?

At press time, the price of gold was $1,500. Historically, gold reached its highest price of $1,900 in 2011.

Gold is the vane of global risk sentiment, and it is very sensitive to risks. Small price fluctuations often reflect large changes in market sentiment. Therefore, even if a major risk occurs, the range of price changes is limited.

Since the beginning of this year, gold has risen from US$1,300 to US$1,500. The main reason is that the Federal Reserve changed its monetary policy and began to cut interest rates on the one hand, and on the other hand, it is the frequent outbreak of sweater wars and various geopolitical crises. If the situation worsens further and a global crisis breaks out, the room for gold to rise may be to reach the peak of 1900 US dollars in 2011, or slightly exceed it.

Therefore, from the perspective of growth space, if gold rises from the current $1,500 to $1,900, the increase will be about 27%. But if such a crisis breaks out, I firmly believe that the rise of mainstream currencies led by BTC and Ethereum in digital currencies will be far greater than the 27% of gold.

So in the long run, the income of investing in gold and PAXG is far inferior to investing in digital currency.