As the price of gold plummeted Friday, CNBC’s Jim Cramer said the rise of cryptocurrency could partially explain the sudden disinterest in the precious metal – a possible sign that the mainstream has flipped the script on Bitcoin (BTC) and digital assets.
When asked why gold isn’t recovering this week amid the political chaos on Capitol Hill, Cramer said the market is not as chaotic as it seems that all money is going into cryptocurrency:
either it’s not that chaotic out there, so gold doesn’t jump or it’s all crypto! But remember there hasn’t been a flight to quality (treasurys) https://t.co/nExv3O7dRm
– Jim Cramer (@jimcramer) January 8, 2021
The price of gold sold over $ 60 on Friday, reaching as low as $ 1,852.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Bitcoin, meanwhile, rose to new all-time highs above USD 41,000.
Cramer is a recent conversion to Bitcoin and cryptocurrency, after buying the mid December dip when BTC was below $ 18,000. He then said of his purchase:
“I will buy – as I usually do – if something comes down […] I’m going to diversify into Bitcoin – not a big position for me – but it’s definitely important to be diversified, and Bitcoin is an asset and I want to have a balance of assets. “
If Cramer held on to his BTC, his position has now more than doubled.
The flagship cryptocurrency continues to outperform gold and all other major assets, thanks in part to an influx of new institutional buyers. Measured in precious metal, one bitcoin is now worth more than 20 ounces of gold. A week earlier, the Bitcoin gold price was about 15 ounces.
The idea that Bitcoin is diminishing gold’s market share is nothing new. A recent analysis by JPMorgan Chase concluded that Bitcoin’s digital gold story is pulling investors away from precious metals. The analysts said this trend could increase as more institutional money flows into the crypto space.