Gold Plunges as Bitcoin Rallies
The price of Gold took a hit as the price of the largest cryptocurrency, Bitcoin, soars. Bitcoin, having reached over $41k today, is having the biggest week in history but Gold on the other hand just lost over 1000 points as the week comes to an end. Gold price increased at the start of the week as the price of other cryptos soars as well, but the last few days in the week has been bad for the metal as the price hit a historical barrier on Tuesday, Jan. 6, and declined sharply, losing more 1000 points in its price. Gold was trading around $1,958 per ounce in the early hours of Tuesday before the price sharply moved down during the US session. The price of Gold hit a low of $1,828 during the trading hours of Friday before the market closes for the week.
The host of CNBC’s Mad Money responds to gold’s surprising underperformance this week.
As reported by Cointelegraph, "CNBC’s Jim Cramer said the rise of crypto may partly explain the sudden disinterest in the precious metal — a potential sign that the mainstream has flipped the script on Bitcoin (BTC) and digital assets."
When asked why gold isn’t rallying amid the political chaos on Capitol Hill this week, Cramer said the market is either not as chaotic as it seems or that all of the money is going into cryptocurrency:
The price of gold sold off more than $75 on Friday, hitting a low of $1,828.27 per troy ounce on TradingView. Bitcoin, meanwhile, surged to new all-time highs above $41,000.
Cramer, who recently bought the mid-December 2020 dip when BTC was under $18,000, as reported by Cointelegraph, made this remark at the time of his purchase:
“I will buy like I usually do as something comes down. I’m going to diversify into some Bitcoin — not a big position for me — but it's certainly important to be diversified, and Bitcoin is an asset and I want to have a balance of assets."
“If Cramer held onto his BTC, his position has more than doubled by now,” - Cointelegraph.
“The flagship cryptocurrency continues to outperform gold and every other major asset, thanks in part to an influx of new institutional buyers. Measured in bullion, 1 Bitcoin is now worth more than 20 ounces of gold. A week earlier, the Bitcoin-gold rate was around 15 ounces.”
“The idea that Bitcoin is taking market share from gold is nothing new. A recent analysis from JPMorgan Chase concluded that Bitcoin’s digital gold narrative is pulling investors away from precious metals. The analysts said this trend could intensify as more institutional money pours into the crypto space.” – As reported by Cointelegraph.
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Tobi is a full time day/swing trader with 3 years’ experience in the currency and commodity market. He is interested in cryptocurrencies in combination to the current financial system. Tobi holds a bachelor's degree in Agriculture.
