Gold versus Bitcoin has been a popular theme in the press and amongst a range of analysts. We find most articles to be shallow attempts to drum up a rivalry where none exists. The latest to gain attention was a January commentary by Goldman Sachs in which Bitcoin is touted as a store of value that may take significant market share from gold. Rather than cannibalizing each other, it is more likely that most of the money that flows into both gold and Bitcoin originates from other asset classes (stocks, bonds, currencies) or from savings and other cash hoards.
Bitcoin has yet to be tested in an economic downturn and bear market. Gold and gold stocks enjoyed outstanding performance during the recessions following the 2000 tech bust and the 2008 financial crisis. With the coming rate hiking cycle, the odds of an economic downturn increase and Bitcoin may have a golden opportunity to prove whether it is indeed a store of value that is just as good as gold.
MVIS Global Junior Gold Miners Index
28/02/2021-28/02/2022
Source: MV Index Solutions. All values are rebased to 1,000. Data as of 28 February 2022.
About the Author:
Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.