Experts: Gold outflows are pushing Bitcoin higher

Gold’s prospects seem to dim as Bitcoin’s glitter

According to multiple experts, one possible reason for Bitcoin’s remarkable recent price rise are massive investor outflows from another popular inflation hedge: gold. 

Spot gold swooned over the past week, falling 4.62% to $1,857. The asset previously had been surging in unison with Bitcoin, which is up over 40% from $28,000 lows last week.

In a Tweet on Friday, Charlie Morris, founder and CIO at ByteTree Asset Management, said that the pullback in gold might be attributable to investors moving to Bitcoin:

With bond yields up and inflation expectations down today, #gold has taken a hit. This justifies a $50 sell off, but price is down $120. I’d attribute the excess to flows moving towards #Bitcoin pic.twitter.com/qsWBb8NaXA— Charlie Morris (@AtlasPulse) January 8, 2021

Likewise, earlier in the week, CNBC’s Mad Money host Jim Cramer said that the outflows from gold ETFs are “all going to crypto.” Tracking inflows and outflows from Grayscale’s Bitcoin investment trust and gold ETFs back this assertion, as Grayscale has eclipsed gold: 

#Bitcoin’s competition w/gold has already started as evidenced by >$3bn of inflows into Grayscale Bitcoin Trust & >$7bn of outflows from Gold ETFs since Oct, JPM says: Competition w/gold as alternative currency will continue given millennials will become over time more important. pic.twitter.com/lkXmDIN9e4— Holger Zschaepitz (@Schuldensuehner) January 4, 2021

The moves could be a sign of Bitcoin’s rising status as a legitimate asset class. Gold and Bitcoin have long been linked as both are seen as a way to protect wealth against inflation and macroeconomic uncertainty, but if the price movements over the last week are any indication, however, Bitcoin may be winning the narrative race. 

In an interview with Bloomberg, Coinshares chief revenue officer Frank Spiteri said that the narrative surrounding Bitcoin as an inflation hedge is gaining legs “in the face of a highly unconventional monetary policy environment.”

“It seems like we’re in the middle of a simultaneous awakening among institutions to Bitcoin as an uncorrelated store of value assets,” he said.

The observations from experts come after a unique flippening earlier this week: as of Friday, a single Bitcoin is worth more than a 20-ounce gold bar.

Still, for all the bearish price action and Bitcoin’s ascendancy, certain high-profile gold bugs refuse to budge on their positions. In a Tweet yesterday longtime Bitcoin skeptic and gold investor Peter Schiff claimed that once investors “understand” the inflation risk, they’ll return to bullion:

Today’s weak economic data on jobs is causing investors to buy risk assets and sell safe-havens like #gold. The weaker the economy gets the more money the Fed prints to prop it up. So, the real risk is #inflation, and once investors understand this, they will seek safety in gold.— Peter Schiff (@PeterSchiff) January 8, 2021
http://dlvr.it/RqFK4T

You might be interested in …

Crypto Long & Short: 4 Metrics That Show How the Current Bitcoin Rally Is Different From 2017

Uncategorized

The current bitcoin bull run is indeed different from three years ago, though that doesn’t mean we won’t see another peak-and-trough cycle.http://dlvr.it/RmD6Dx

Read More

Crypto Regulation Commences in Serbia: Trading, Mining Legalized

Uncategorized

Serbia has started regulating the crypto industry as the country’s law on digital assets has gone into effect. It requires cryptocurrency service providers to obtain a license and legalizes crypto activities, including trading and mining. Serbia Starts Regulating Cryptocurrency Serbia’s recently adopted Law on Digital Assets went into effect last week with a publication in […]

Read More

Facebook’s Libra Crypto Gets Ready to Launch in January as a Single Coin

Uncategorized

Facebook’s libra cryptocurrency is reportedly preparing to launch with a single cryptocurrency, a scaled-down version of its original plan. The launch date for Facebook’s libra could be as early as January. Launch Date for Facebook’s Libra The cryptocurrency libra, proposed by social media giant Facebook, is reportedly preparing to launch as early as January next […]

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

css.php