Over the last few days, the cryptocurrency complex reminded us why we need to stay emotionally steadfast. After trading sideways around the $10,000 level, bitcoin took a modest hit on September 23. A day later, bitcoin into $8,400 territory. At time of writing, the crypto is barely holding onto $8,000. This led me to ask a question: could gold bullion be at least partially responsible for the collapse?
At first glance, the notion seems ridiculous. More likely, crypto proponents argue, news items that directly impact the sector contributed to the fallout. For instance, rumors abound that Facebook’s Libra cryptocurrency project is being delayed, or possibly canceled. Although the social media firm intended Libra to work with the system, its existence nevertheless gave cryptos credibility.
Now, blockchain market proponents must look for another catalyst.
Still, while I appreciate Libra’s impact on the sector, I think other factors are involved. Given macroeconomic fears and the demand for viable investment alternatives, bitcoin really shouldn’t tumble here. If anything, this is a time for proven digital assets to continue rising higher.
After all, despite some recent weakness, gold bullion has performed robustly since this past May. Again, with macroeconomic concerns weighing on investors, a safe haven is exactly what the doctor ordered. Arguably in this circumstance, the precious metals offer a superior platform to park your money.
Nothing Shines Quite Like Gold Bullion Investments
Before you get upset, please hear me out: I’m long-term bullish on (major) cryptocurrencies and will probably remain so for the foreseeable future. Technology is about progress, and progress by nature doesn’t move backwards.
However, price typically moves on the collective, and not on the individual. Ultimately, it doesn’t really matter what I think or say; rather, it’s what most everyone else believes.
Based on the crypto complex’s historical volatility, as well as its myriad controversies, many investors are simply exhausted with the extreme price swings. Further, they’re leery about the hacks and security breaches and the general complexity of this investment class.
With gold, it’s simple: you buy it, you hold it, you protect it. As an investment class, very little has changed about it. Investing in gold is innate like breathing.
However, we can’t say that about bitcoin. While many folks have learned the platform, it remains an enigma to many others. And that’s why currently, gold bullion appeals more to the “looky-loos.” Positive sentiment has finally returned, making the metals a much more viable avenue.
That’s not to say that cryptos won’t return to their former glory. But with clarity and certainty taking a premium in this environment, look to gold, not bitcoin for nearer-term solutions.