An interview by Bloomberg has shown that the Old Mutual Gold & Silver Fund has earmark about $11 million from its holdings since early this year to invest in Bitcoin – the world’s most popular cryptocurrency. This is another feather in Bitcoin’s cap.
Bitcoin Paving Way for Reintroduction of Gold as Global Money
Ranjeetha Pakiam reports:
“The Old Mutual Gold & Silver Fund, which manages $220 million of mostly precious metal equities, is jumping on the bitcoin wagon.” This could mean that Bitcoin is paving way for the re-introduction of Gold as global currency.
Fund manager Ned Naylor-Leyland explained to Ms. Pakiam how they have been gobbling up bitcoin since April “with a mandate to allocate as much as 5 percent to cryptocurrencies,” Ms. Pakiam writes.
This is a response from the fund manager to an individual who viewed bitcoin as too volatile, back in 2015.
“Bitcoin is paving the way for the reintroduction of gold as global money,” Mr. Naylor-Leyland surmised. Rather than viewing bitcoin as a threat to the precious metal, he instead views it as a way to educate investors. “Bitcoin was explicitly designed to be digital gold. So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point.”
It’s a curious end-run toward a broader goal, but no one would blame the fund. Bitcoin is up hundreds of percent this year. And since the fund’s reported buying spree in April, the digital currency has risen from just over 1,000 USD to the current floor of above 8,000 USD.
Bitcoin a Way to Sound Money
“Bitcoin and blockchain resolve” divisibility problems, Ms. Pakiam writes of the fund manager’s thoughts, “[problems of] ownership and speed of transmission.”
“We’re going to revert to sound money,” Mr. Naylor-Leyland is quoted. “If you imagine sound money and blockchain together, there’s quite an exciting potential outcome.”
Crypto maximalists have suggested that it is simply a matter of time before Bitcoin overtakes gold’s position. And as well as bitcoin has done in less than a decade, the precious metal has a four millennia headstart.
Still, the better bet seems to be understanding a larger point: the metal’s limitations were the inspiration behind bitcoin’s creation in terms of scarcity, mining, and utility. They’re not mutually exclusive though: both are preferable to the whims of government fiat, sound money advocates urge.
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