As the price of gold dropped on Friday, CNBC’s Jim Cramer said the increase of crypto may help understand the sudden loss of interest in precious metal—a possible indication that the mainstream has flipped the bitcoin script and digital assets.
When asked why gold is not rallying this week on Capitol Hill in the middle of the political chaos, Cramer said the market is either not as chaotic as it looks or because all the money goes into the cryptocurrency. Cramer is a new Bitcoin and cryptocurrency conversion, having acquired the dip in mid-December 2020 when BTC was under $18,000 and if Cramer held onto his BTC, his position has more than doubled by now.
On Friday, the price of gold sold off over $60, reaching a low of $1,852.50 per troy ounce on the New York Mercantile Exchange Comex division. Meanwhile, Bitcoin soared to fresh all-time highs of $41,000.
The flagship cryptocurrency, due in part to an explosion of new institutional buyers, continues to outperform gold and any other significant asset. Measured in bullion, 1 Bitcoin is worth over 20 ounces of gold now. The Bitcoin-gold rate was about 15 ounces one week ago.
There is nothing new about the idea that Bitcoin is capturing market share from gold. A recent JPMorgan Chase report argued that the digital gold story of Bitcoin is pushing investors away from precious metals. The analysts said that as more institutional money pours into the crypto-space, this trend might intensify.