As the gold falls, Jim Cramer says that „all the money is being invested in crypt coins“
CNBC’s Mad Money presenter responds to the surprisingly low weekly gold yield.
As the price of gold plummeted on Friday, CNBC’s Jim Cramer said the rise in cryptomonies could partly explain the sudden lack of interest in the precious metal, a potential hint that conventional audiences have changed their minds about Bitcoin (BTC) and digital assets.
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 cryptomonies:
Either it’s not as chaotic out there so the gold won’t jump, or everything is going 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 in the Comex division of the New York Mercantile Exchange. Meanwhile, Bitcoin rose to new all-time highs above USD 41,000.
Cramer is a recently converted advocate of immediate Bitcoin and crypto-currencies, having purchased the mid-December drop when BTC was below USD 18,000:
He said of his purchase at the time: „I’ll buy, as I usually do, when something goes down […] I’m going to 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 of assets.“
If Cramer held on to his BTC, his holdings have already more than doubled in value.
The flagship cryptomoney continues to outperform gold and other major assets 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 about 15 ounces.
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.