…the $2.4 trillion global gold market is very deep. Millions of investors own a piece of the pie in the form of bullions, jewelry, coins or other investments. In comparison, the entire digital currency market is worth $600 billion, with bitcoin only accounting for about half.
…Garner was skeptical that gold is falling because bitcoin is soaring. Gold pulled back below $1,250 an ounce four times this year and managed to bounce back, and no one blamed the declines on bitcoin, she said.
Moreover, gold’s charts suggest its value could go higher. Historically, gold tends to decline in early December, then buyers come in and drive the precious metal to rally until March.
PG View: Garner also cited COT data and the dollar chart as further evidence of upside potential in gold.
“…gold is not being supplanted by bitcoin as the go-to alternative to actual currency, and the charts, as interpreted by Carley Garner, suggest that gold might be ready to make a comeback. And while I won’t discourage anyone from buying bitcoin — just know the risks, know your limitations — I’m with Carley when it comes to the precious metal, not the precious keystroke.” — Jim Cramer
Potential investors in bitcoin should steer clear of a dangerous gamble and not complain to financial regulators if things do go wrong, Denmark’s central bank governor warned.
…The comments echoed concerns of a bubble about to burst made by other market participants and central bankers after the price of bitcoin rocketed more than 1,800 percent since the start of the year.
Rohde said that if people decide to ignore his warnings, they should realize that they are pretty much on their own.
European Union states and legislators agreed on Friday on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies, the EU said in a statement.
The agreement is part of a broader set of measures to tackle financial crimes and tax evasion. EU legislators also backed stricter controls on pre-paid cards, and raised transparency requirements for the owners of trusts and companies.
…Bitcoin exchange platforms and “wallet” providers that hold the cyber currency for clients will be required to identify their users, under the new rules which now must be formally adopted by EU states and European legislators and then turned into national laws within 18 months.
Albert Edwards has a new warning: Stop focusing on the bitcoin bubble, and look instead at what’s happening in the equities market.
…the “the underlying profits recovery looks increasingly fragile and indeed on some key measures a rapid deceleration is underway.”
“Amid all the focus on the parabolic rise of Bitcoin it has gone almost unnoticed that, following its rapid ascent, the main S&P Composite index is now most overbought since 1995.
…”As well as overvaluation, we showed recently that the extreme bullishness currently prevailing among professional advisors has not been seen in markets since (just before) the 1987 crash,” he writes.
PG View: It might be worth considering taking some money off the table in stocks and diversify with some gold!
The surging price of bitcoin has not put investors off buying gold, with “no evidence of a mass exodus” from the safe haven metal despite a drop in prices recently, according to research released by Goldman Sachs this week.
Jeffrey Currie, Goldman’s global head of commodities research, said that the groups of investors looking to invest in the two assets are vastly different, therefore protecting gold demand, he wrote in a note to clients reported by the Financial Times.
…”We believe the composition of demand between bitcoin and gold is the key difference in the recent price action. In our view bitcoin is attracting more speculative inflows relative to gold.”
The National/Peter Cooper/12-10-17
After bitcoin’s spectacular price spike this year, could gold be about to stage a similar grand finale to its bull market that began back in 2000?
Bitcoin also took many years before its final speculative reach-for-the-sky. Indeed, the scramble to buy at the last minute has been reminiscent of gold’s previous price spike back in 1980 after a long run up in prices during the economically unstable 1970s.
There are certainly goldbugs who argue for $10,000 an ounce convincingly. Ex-CIA macroeconomic adviser Jim Rickards’ latest tome, The New Case for Gold explains how gold will again be needed as a linchpin of the global economy.
PG View: That price target seems pretty optimistic, but given the rise in BitCoin this year, why couldn’t a real tangible asset make a similar jump?
BusinessInsider/Jacqui Frank & Kara Chin/12-03-17
Jim Rickards is the editor of Strategic Intelligence and the author of Currency Wars: The Making of the Next Global Crisis. He believes gold can go to $10,000 an ounce but he is much more skeptical about bitcoin. Rickards doesn’t trust the bitcoin price action and doesn’t believe the cryptocurrency will fare well in a financial crisis.
Despite what the crypto-evangelists will tell you, digital tokens will never and can never replace gold as your financial hedge.
Here are six reasons why.
#1: Cryptocurrencies Are More Similar to a Fiat Money System Than You Think.
#2: Gold Has Always Had and Will Always Have an Accessible Liquid Market.
#3: The Majority of Cryptocurrencies Will Be Wiped Out.
#4: Lack of Security Undermines Cryptocurrencies’ Effectiveness.
#5: Hype and Speculation Continue to Drive Cryptocurrencies’ Value.
#6: Cryptocurrencies Do Not Have Gold’s History as a Store of Value.
Cryptocurrencies like bitcoin are not the “new gold,” Goldman Sachs said in a note, advising investors that precious metals “remain a relevant asset class” in portfolios.
In a note to clients earlier this week, Goldman detailed the benefits of holding gold in a portfolio.
“The use of precious metals is not a historical accident – they are still the best long-term store of value out of the known elements,” the investment bank said.
PG View: I remain amused by the financial press’s instances on using a gold coin emblazoned with the symbol for some cryptocurrency in both pro and con stories (the video accompanying this piece is no exception). There is nothing tangible about cryptocurrencies. Absolutely nothing. And if they need to represent it with images of something that it most definitely is not (I do it just to make that point), it might be worth considering just buying the gold in the first place.
The price of Bitcoin is up 600% over the past 12 months, and 1,600% in the past 24 months. But the long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates – and there is no reason to expect virtual currency to avoid a similar fate.
“My best guess is that in the long run, the technology will thrive, but that the price of Bitcoin will collapse.” — Kenneth Rogoff