Recently, Nic Carter, a highly popular crypto researcher, informed that bitcoin has taken over OTC gold market in settlement volumes. Bitcoin’s performance is commendable as the currency has already lost 70 percent of its price hike in December 2017.
As per the clearing records of the London Bullion Market (LBMA) the international global gold over-the-counter (OTC) market is ready to settle $446 billion in 2018 with a settlement volume of less than $30 billion from January on a monthly basis. The news was confirmed by the top five clearing members of the LPMCL- ICBC Standard Bank, HSBC, Scotiabank, JP Morgan and UBS.
On the other hand, Carter cited the data provided by a crypto market data collector and provider named Coin Metrics. According to the stats, the bitcoin market has been able to process $848 billion till now, and it’s on the verge of surpassing $1.38 trillion by the end of this year.
One should know that LBMA holds a minimum of 70 percent share in the global gold OTC volume. Whereas, bitcoin has traded a higher volume in the last eight months than the supposed settlement volume of gold’s entire market for the current year.
Carter stated, “I’m conservatively estimating the London OTC market for gold, overseen by the LBMA, at 70% of global volumes. With these, I can estimate the total net volume of regulated gold settlement at $446b for 2018 (based on six months of data). Conservatively, (adjusted estimates), Bitcoin has settled $848b this year and is on track to settle $1.38T. Bitcoin, it appears, has quietly surpassed the OTC gold market in settlement volumes.”
Never the less, the comparison carried out by Carter avoided ripple, ethereum, bitcoin cash, litecoin, Cardano and other popular digital currencies. Their inclusion holds importance as ethereum settles two times more transactions than BTC on a daily basis.
Normally, the transaction sizes are smaller compared to BTC as most of the payments are carried by decentralized applications used to minimize processing cost.
The huge difference in trading volume of OTC and bitcoin hints that the mainstream market has acknowledged BTCs usefulness as a medium of exchange and store of value. The most prominent digital coin has some significant advantages over gold like liquidity, fungibility, and transportability.
The huge discrepancy in the volume of the gold OTC market and the volume of Bitcoin has demonstrated that the mainstream has started to acknowledge and adopt Bitcoin as a premier store of value and a medium of exchange, due to its striking advantages over gold, such as fungibility, liquidity, and transportability.
Having a similar opinion last year, a senior analyst at JPMorgan, Nikolaos Panigirtzoglou claimed that virtual currencies could evolve as a prominent asset class and outrun gold if highly regulated financial entities like exchange-traded funds (ETFs) and futures are injected in the US market on a greater scale.
If the highly anticipated CBOE bitcoin ETF gets a green signal from the US Securities and Exchange Commission (SEC) before February 2019, then more investors will be able to use the crypto market.