Bitcoins ‘can’t beat gold or silver’

<p>Bitcoin is growing as a legitimate currency.</p>

Bitcoin is one of the major success stories of the financial sector in 2013, but it still does not stand up to gold or silver in terms of store of value.

According to experienced stock investor John Paul Whitefoot, bitcoins are still in their infancy and only made it on to the radar of investors earlier in the year.

"That doesn't mean it isn't a legitimate option for speculative investors; clearly, it is, as the digital currency is responsible for the making of many new millionaires this year with only more to come," he said.

Writing for Daily Gains Letter, he explained that the currency's volatility makes it less of a safe haven than gold or silver.

This is despite the fact gold has lost around 27 per cent of its value since March, leading many investors to question whether the reputation of the precious metal as a leading safe haven has been damaged for good.

However, gold did rise in value in the last two days, bouncing back from the five-month low it fell to earlier in the month.

Find out about commodities trading and learn CFD strategies at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.