Hold Gold For Safety, Buy Bitcoin As Speculation

March 9, 2018 at 10:20


Bitcoin can never replace or even compete with gold, as each asset serves a completely different purpose, founder of Goldmoney Josh Crumb said speaking on the sidelines of the Prospectors and Developers Association of Canada (PDAC).

“There are different reasons to invest in gold or bitcoin. If you are looking for a stable store of value and you are worried that the central bank is screwing up, then you buy gold as safety. If you are looking for something to go up 10x, you buy bitcoin. But, you do the latter knowing that it can also go down 10x,” Crumb said on Tuesday.

Despite some fundamental differences between the two investments, there is still a clear connection between the two — they are both something that a trader can own outside the banking system.

“They are not just a contract, they are essentially a commodity,” Crumb pointed out.

Important to keep in mind that despite being pitted against each other, bitcoin is not competing with gold.

The competition angle comes in only when a trader is interested in speculative assets, which usually means that the investor is not considering gold in the first place, Crumb said.

“[Bitcoin] is for people looking for something speculative and for something with a lot of volatility. So, bitcoin is taking market share from that type of investment. But as far as gold, people buy the yellow metal to be a store of value. And there is nothing about bitcoin that is a store of value.”