Late last month, Ronnie Moas stated that Bitcoin is a baby and not a bubble despite it worth. However, earlier this month, Ron Paul survey shows that people prefer bitcoin over gold, making Ronnie’s assertion of less value. Ron poll finding has further been substantiated by analysts in a recent interview on CNBC. These analysts declared that Investors are dumping gold in favor of Bitcoin. Phillip Streible of RJO Futures, who happens to be one of the analysts, boldly stated that “Bitcoin has stolen a large market share of gold.”
Larry McDonald of the Bear Traps Report explained how they are tracking this shift, by stating that generally when there is a decrease in bond rates, value of gold goes up. However, in recent weeks, the bond rates have decreased, and gold has simultaneously fall by two percent – a such uncommon event.
Analysts consider this change as the result of increasing investments in Bitcoin, among other cryptocurrencies. According to McDonald:
“Over the last two years, every time rates have come down, and this week rates have moved lower, you had gold go up. Almost every time, there has been an 82 percent correlation between gold and bonds. This week, for the first time, that correlation broke down, and I do think it has something to do with Bitcoin.”
While the price of gold has been traditionally stable, the recent declines show the investment pool has begun moving into cryptocurrencies. In fact, according to McDonald, the total market cap of all cryptocurrencies as a fraction of liquid tradeable gold is already up two or three percent from last year, stating “cryptocurrencies are definitely eating into the gold play.”
If Bitcoin should become more valuable than Gold, then it may not become a transactional currency as posit by Jerry Yang
If you are an investor, will you also be dumping Gold for Bitcoin? Tell us your opinion