Are BTC Investors Switching To Gold? Van Eck Sure Thinks So

In a recent interview with CNBC, the CEO of Van Eck Associates investment management firm opined that investors who had bet their money on Bitcoin were moving to gold. Jan Van Eck, who has earlier expressed a great deal of confidence in the potential of Bitcoin ETFs (exchange traded funds) now feels, given the current market conditions, that gold is outshining Bitcoin by a massive margin.

Van Eck admitted that a number of investors had shifted their demand from gold to Bitcoin right after its dream run in late-2017 but since then, the crypto market has collapsed alongside Bitcoin’s price point.

Even though some staunch supporters of the pioneering cryptocurrency, like the Winklevoss Brothers, have continued to hold that Bitcoin will one day break gold’s trillion-dollar market cap, the reality has been far from being that savoury. About this development, Van Eck commented:

“Interestingly, we just polled 4,000 Bitcoin investors and their number one investment for 2019 is actually gold. So gold lost to Bitcoin and now it’s going the other way.”

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In the same interview, the chief investment officer and founder of Seymour Asset Management, Tim Seymour, opined that Bitcoin did not have a very strong credibility as a store of value. In the discussion about Bitcoin ETFs, something which the Van Eck Associates had also planned to issue before such a request was withdrawn from SEC’s consideration by the BZX Exchange (CBOE), Seymour commented:

“Not only have we lost all liquidity on the underlying [commodity] but truly outside of the existential blockchain argument, it’s been very difficult to argue store of value which is really what we started hearing about. Gold is a store of value and there’s no disputing that.”

Van Eck had created some of the most well-known gold ETFs in the market, namely the GDXJ junior gold miners ETF and the GDX gold miners ETF. In that regard, Van Eck told the panel that these assets have been extremely successful over the course of the past quarter or so. He explained:

“In the majority of the days in Q4 when the S&P was down, GDX was up,” he said, before concluding “that decoupling makes me really excited about gold shares as a diversifier.” Furthermore, according to CNBC, the GDX ETF grew by 14 percent in the fourth quarter, which according to the article is its best performance since Q2 2016. Moreover, the GDX is up under 1 percent this year, as the S&P 500 grew 6 percent.

Clearly, what Bitcoin has been doing over the equivalent period can hardly compete with the interest in gold as an investment at this point in time.