Are Cryptocurrencies Replacing Gold?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Are cryptocurrencies replacing gold, silver and other metals as the new safe-haven plays? That is the question many investors are asking themselves as they look for places to put their money safely. The simple answer is no, with physical products like gold or silver you can touch, hold or feel. Cryptos are stored in an imaginary electronic wallet with imaginary value.
OK, cryptocurrency value is not imaginary because it does trade on exchanges through the auction market going through the price-discovery model. There is nothing wrong with owning some of the cryptocurrencies as long as you recognize that they are an investment like any other. They are not a hard asset, they are not a soft asset, and they are a new asset class that is yet to be determined.
With equities at record highs along with Bitcoin, the metals have become somewhat ignored. Gold has held up well against the new-found competition of cryptocurrencies and their old nemesis, the equity markets. Markets have room for all of these products, but gold is still considered one of the best hard assets that you can store, touch, feel and trade. Look for gold to remain the No. 1 place to invest when there is fear about the equity markets and fiat currencies.