Some people were predicting Bitcoin would push through the $10,000 level before the end of the year. At the rate it’s going, it may happen before the end of the month.
Bitcoin is on a roll. The cryptocurrency broke $9,000 over the Thanksgiving holiday and quickly pushed up to $9,700. There are also increasing signs of mainstream adoption. CME Group plans to list Bitcoin futures beginning in mid-December, and Coinbase says it added more than $100,000 new users over the Thanksgiving holiday.
Some analysts look at all the action in the world of cryptocurrency and predict the demise of gold. But there are plenty of reasons to believe gold will be just fine.
Last month, Jim Rickards called the raging gold vs. Bitcoin argument a ‘phony debate,’ because cryptocurrencies and precious metals are fundamentally different things.
From my perspective, you might as well discuss gold versus watermelons or bicycles versus bitcoin. In other words, it’s a phony debate. I agree that gold and bitcoin are both forms of money, but they go their own ways. There’s no natural relationship between the two (what traders call a ‘basis’). The gold/bitcoin basis trade does not exist.’
The managing director of Australia’s biggest gold mining company recently made a similar point. Sandeep Biswas called Bitcoin a new age currency entering into the mix with old age currencies, but he doesn’t view it as a threat to the value of gold.
This post was published at Schiffgold on NOVEMBER 27, 2017.