Bitcoin’s features and its potential status as a safe haven asset have started standing out as the gold market is starting to face an unprecedented stress test because of the COVID-19 outbreak.

The COVID-19 outbreak, has been causing a panic worldwide over its severe effects on society and the economy. As reported, U.S. congressional leaders and the White House recently reached an agreement on a $2 trillion stimulus relief package to support the economy, but the panic has also led to heightened demand for gold.

The precious metal is one of humanity’s oldest methods of storing wealth, and often sees its price surge when the U.S. equity market crashes. Because of the COVID-19 pandemic, however, it’s hard to get the precious metal even as demand soars. Speaking to Bloomberg the sales manager at Silver Bullion Pte Ltd in Singapore, Vincent Tie, stated:

Since last week, face masks, hand sanitizers, toilet rolls and bullion have something new in common – they run out when everyone tries to buy them.

Demand for gold is currently soaring as for governments the precious metal can be used as a universal currency that can provide a buffer for national reserves, while for investors it’s used as a way to shield a portfolio from losses.

While the price of bitcoin plummeted earlier this month from a $7,300 high to a $4,000 low before recovering and climbing back up to $6,600 at press time, the flagship cryptocurrency may soon have more supporting it as “gold 2.0.”

Gold’s Supply Chains Under Stress

Gold’s supply chains are currently under stress because of the coronavirus outbreak, Bloomberg reports, as miners, refineries, and even transportation methods are being affected by the pandemic.

For one, miners are seeing operations get shut down as a security measure. In South Africa, mining operations were halted with an industrywide shut down, a move that the 150-year-old mining industry hasn’t seen before.

Gold refineries, which then get the gold ore from miners and scrap existing products to produce bars and coins of various sizes are also being affected. Three of the largest refiners in the world, located in Switzerland, were also forced to shut down after authorities ordered a lockdown.

While Bitcoin’s hashrate plummeted 45% since its all-time high because of rising difficulty and falling price, the network is still more secure now than what it was 12 months ago.

Bitcoin hashrate and priceSource: CryptoCompare

Transporting gold is also a growing challenge, as the precious metal if often transported on ordinary commercial flights, and these being are being canceled by the thousands. Moreover, Bloomberg details there’s a limit on the amount of gold that can go on each flight as it’s impossible to get insurance beyond a specific amount.

It’s not unheard of, however, for nations to use the military for gold shipments, with armed escorts accompanying the planes. Moving gold is, as a result, extremely cost amid the outbreak, while moving BTC can have a relatively small cost even for large amounts. Earlier this year, crypto exchange Bitfinex moved $1.1 billion for an $80 fee.

Featured image via Unsplash.