Investors No More Interested in Bitcoin, VanEck CEO says, Gold is the Choice Yet Again
Bitcoin’s crash has turned the investors from the leading cryptocurrency to gold according to Jan Van Eck, CEO of Van Eck Associates. Currently, Bitcoin is trading around $3,500 after losing more than 80 percent of its value since hitting its all-time high at $20,000 in December 2017.
We reported in our previous article that popular crypto trader and economist Alex Kruger shared that ongoing trading volume shows Bitcoin is in the accumulation phase. However, according to this ETF strategist, investors are rather turning away from this digital asset.
Van Eck, recently in an interview with CNBC’s “ETF Edge” shared that Bitcoin investors are now moving to the traditional asset gold.
“I do think that Bitcoin pulled a little bit of demand away from gold last year, in 2017. Interestingly, we just polled 4,000 bitcoin investors and their number one investment for 2019 is actually gold. So gold lost to bitcoin and now it's going the other way.”
During the year 2017, Bitcoin rallied from about 1,000 to its peak to $20,000 in December 2017. Meanwhile, gold surged 4 percent in the same time period.
- Bitcoin 2-years price chart, Source: Coinmarketcap
- Gold 2-year price chart, Source: Goldprice.org
“Not only have we lost all liquidity on the underlying [commodity] but truly outside of the existential blockchain argument, it's been very difficult to argue store of value which is really what we started hearing about,” said Tim Seymour, founder and Chief Investment officer at Seymour Asset Management. “Gold is a store of value and there's no disputing that.”
While Crypto Industry Expert says, Gold is “Physically Vulnerable”
VanEck’s firm that created the “most well-known gold ETFs: the GDX gold miners ETF and GDXJ junior gold miners ETF,” is also the one working on Bitcoin ETF.
And this year, he says the best way to play in the gold market is through gold ETFs,
“The shares have been acting tremendously well over the last two or three months … It's starting to zig when the stock market zags. In the majority of the days in Q4 when the S&P was down, GDX was up. So that zigzag, that decoupling makes me really excited about gold shares as a diversifier.”
However, crypto industry experts say, Gold is actually physically vulnerable as Nick Szabo, a cryptographer recently shared one of the problems,
“ with gold reserves is that they’re physically vulnerable. When the Nazis conquered countries in Europe, the first place they went to was a central bank’s gold reserves.”
Some experts, on the other side believes Bitcoin would surpass gold’s market cap. Tyler Winklevoss of Gemini stated,
“Our thesis around Bitcoin’s upside remains unchanged. We believe Bitcoin is better at being gold than gold. If we’re right, then over time the market cap of Bitcoin will surpass the ~$7 trillion market cap of gold.”
Van Eck’s comments about Bitcoin investors moving to gold got some Bitcoin enthusiasts rather hopeful as one wrote on Reddit, “$7.8 trillion gold picking on $0.063 trillion bitcoin… The fact that bitcoin and gold are even compared this much is promising.”