As 2017 came to an end, the price of Bitcoin started rising against the USD. Many investors who have invested in gold for many years sold their gold and started investing in BTC instead. Unfortunately, the hype did not last. The price of BTC fell dramatically against the USD after it reached a high of almost $20,000 per unit. Investors referred to this period as the cryptocurrency winter.
According to the CEO of Van Eck Associates, Jan Van Eck, the Bitcoin streak is dead and investors are gravitating toward more traditional commodities. In his words:
“I don’t think BTC took a lot of demand from gold in 2017. We recently conducted a survey on 4,000 BTC investors and discovered that their first investment choice for the year 2019 is gold. Gold lost to BTC and now Bitcoin is losing to gold.”
During the first 12 months before Bitcoin reached its all-time high, the value of the flagship cryptocurrency increased 25 times over. During the same period, gold was up by 4%. Now, 12 months after the cryptocurrency reached its peak, it is down by 82% but gold is up by 2.5%.
At this point, it’s going to be difficult for investors to lose interest in gold and revert to BTC According to Seymour Asset Management’s chief investment officer, Tim Seymour. In his words:
“We haven’t just lost all liquidity on the commodity. We have lost liquidity in the blockchain argument. It’s hard to argue that cryptocurrencies can be used as a store of value even if this is what we started hearing during the bull run. Gold is the real store of value, no one can dispute that.”
The fall in the price of BTC has driven investors back to the traditional store of value, gold. This has proven that the cryptocurrency industry isn’t mature enough to offer an asset that will serve as a store of value.