Bitcoin’s price reached $7,500 last week, before retreating below $7,000. The price has jumped more than seven-fold this year. It has appreciated by more than 600% this year, while gold appreciated only by 11%. The tremendous rise in the cryptocurrency’s value is drawing interest from investors all over the world.
Google Trends recently confirmed that, for the first time, global searches related to buying bitcoin have outnumbered those for gold, after previously having exceeded those for silver. Investor interest towards gold is further reduced as the surge in bitcoin’s attraction coincides with that of a successful US stock. Bloomberg reported this Tuesday that one BTC costs more than an ounce of gold, for the first time this year.
The UK-based online vaulting service, BullionVault, has experienced a 30% decline in monthly gold trading. The US stock market's booming behavior may be the reason behind the retreating gold prices, Adrian Ash, BullionVault's research director stated. Ash was further quoted, in Bloomberg’s publication, that investors are being drawn away from gold as they are “distracted by the noise around bitcoin and other cryptocurrencies.”
The gold industry is already using the blockchain technology to track their sales and store information regarding the ownership of the precious metal. The UK’s Royal Mint successfully trialed this blockchain-based system, with 50,000 blocks verified before its public launch. The system has been specially designed to minimize risk to relatively zero.
It is believed that the Chicago Mercantile Exchange (CME) Group’s announcement last week to start trading bitcoin futures contributed to the coin’s rise. Many financial experts, including Thomas Lee of Fundstrat Global Advisors, believe bitcoin to be a better investment option than both stocks and gold. In a segment on CNBC’s Fast Money segment, Lee was asked which one he would invest in if given a choice between gold and US stocks. He replied, “between now and year end, it’s easily bitcoin.”
Big Wall Street investors are also pouring their money into the virtual currency. However, there are still plenty of people who believe that it is all a scam. According to JPMorgan CEO, Jamie Dimon, this is a “bubble that will blow up in investors’ faces.” Business Insider CEO, Henry Blodget, also agrees, having repeatedly said that Bitcoin “has no intrinsic value.”
“Buy Bitcoin” global searches outnumber “buy gold” on Google
Google Trends recently confirmed that, for the first time, global searches related to buying bitcoin have outnumbered those for gold, after previously having exceeded those for silver. Investor interest towards gold is further reduced as the surge in bitcoin’s attraction coincides with that of a successful US stock.