CNBC’s Mad Money presenter responds to gold’s surprisingly low weekly performance.
As the price of gold plummeted on Friday, CNBC’s Jim Cramer said that the rise in cryptomonies could partly explain the sudden lack of interest in the precious metal, a potential hint that the conventional public has changed its view on Bitcoin (BTC) and digital assets.
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When asked why gold isn’t rising amidst the political chaos on Capitol Hill this week, Cramer said that the market isn’t as chaotic as it seems or that all the money was moving into the cryptos:
Either it is not so chaotic out there that the gold is not jumping or everything is going Bitcoin Rush to the cryptomonies! But remember that there has been no flight to quality (treasuries).
The price of gold lost more than USD 60 on Friday, reaching a low of USD 1,852.50 per troy ounce on the Comex division of the New York Mercantile Exchange. Meanwhile, Bitcoin rose to new all-time highs above USD 41,000.
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Cramer is a recent convert and defender of Bitcoin and the crypto currencies, having bought the fall in mid-December when BTC was below USD 18,000:
„He said of his purchase at the time: „I will buy, as I usually do, when something goes down […] I will diversify into Bitcoin, it’s not a great position for me, but it’s certainly important to diversify, and Bitcoin is an asset and I want to have a balance sheet of assets.
If Cramer held on to its BTC, its holdings have already more than doubled in value.
The flagship cryptomoney continues to outperform gold and any other major asset thanks in part to the influx of new institutional buyers. Measured in bars, a Bitcoin is now worth more than 20 ounces of gold. A week earlier, the Bitcoin-gold rate was around 15 ounces.
Bitcoin was worth more than a 20 ounce gold bar when it briefly reached $40,000
The idea that Bitcoin is taking market share away from gold is nothing new. A recent analysis by JPMorgan Chase concluded that Bitcoin’s narrative as digital gold is driving investors away from precious metals. Analysts said that this trend could intensify as more institutional money reaches the crypto market.
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