Gold Fund Manager: Bitcoin ‘Designed To Be Digital Gold’
(Kitco News) - More institutions, including gold funds, are now beginning to embrace the bitcoin revolution as the cryptocurrency stabilized after breaching the $8,000 level for the very first time last week.
The new addition to the bitcoin world is the Old Mutual Gold & Silver Fund, which manages $220 million of what is mostly precious metal equities.
The fund is planning to allocate up to 5% to cryptocurrencies, according to its manager, Ned Naylor-Leyland. The plan is to buy bitcoin, make profit and reinvest into gold and silver assets.
Naylor-Leyland has a very positive outlook on bitcoin that does not clash with gold’s future opportunities.
“Bitcoin was explicitly designed to be digital gold,” he told Bloomberg on November 16. “So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point. It’s about bringing the ownership of disciplined money into the modern world. Bitcoin is paving the way for the reintroduction of gold as global money.”
The popular digital currency had an unprecedented year, breaking all imaginable records and rising more than eight times since January. On Thursday, bitcoin last traded at $8,128.90, after reaching an all-time high of $8,380 earlier on Tuesday.
Bitcoin has many analysts split, with some forecasting a year-end price of $10,000 and others still convinced that bitcoin is simply a distraction.
Cryptocurrency bull, Mike Novogratz, chief executive of Galaxy Investment Partners, said earlier this week that bitcoin’s rally this year is nowhere close to being finished.
Novogratz described bitcoin as digital gold: “Gold has value solely because people say it has value; bitcoin is built on an amazing technology, there’s a limited supply of it.”
Yet, many others, including Goldman Sachs Group Inc., said they prefer gold over bitcoin.
In a recent interview with Kitco News, Rick Rule, president and CEO of Sprott U.S. Holdings, said that even though bitcoin might be a more exciting option than gold this year, investors should not to get distracted by things that “don’t matter.”
“The more people pay attention to stuff that doesn’t matter, the better the chance some old guy like me has to compete,” Rule said, adding that he hopes people will continue to compare gold to bitcoin in 2018 as well.