Where are gold and bitcoin prices headed, and which will perform better?
(Kitco News) - The future of both bitcoin and gold depends on the outcome of the trade wars, according to Clem Chambers of Investorshub.com.
“It’s all down to President Trump and President Xi in China, because gold and bitcoin are basically flight capital and when you look at the relationship between China and America, if you were in China and you thought China wasn’t going to get a trade deal, you’d be seeing that what was going to happen next will be devaluation of the yuan,” Chambers told Kitco News. “If they devalue the yuan, and you’ve got a stack of yuan, you’ve just lost a lot of money.”
Both bitcoin and gold have seen lackluster price performances in November. Bitcoin is down 18% from its late October highs, and spot gold is down 3% during the same period.
Chambers attributes low interest in these assets to renewed investor confidence in equities.
“Why wouldn’t you be in equities? QT is dead; quantitative tightening is over, QE is storming back thanks to the Fed. Over in Europe, they’re QEing like crazy, and after Brexit is sorted out, they’re going to be QEing even in the U.K.,” he said.
Comparing the two assets, when it comes to practicality, gold loses out to bitcoin, which is why the most significant cryptocurrency is expected to outperform the yellow metal, Chambers added.
“If you’ve got to move fast, uncertainty means bitcoin. I mean gold, you can’t really carry much of it, it’s hard to store, it’s quite difficult to buy…it’s much easier to buy bitcoin,” he said.
Bitcoin’s superior versatility and better supply-demand fundamentals will likely send prices soaring, he noted.
“I think that bitcoin can easily go to $20,000, I’m expecting it to go to $50,000,” Chambers said.