High Bitcoin Prices Drive Gold Demand

High Bitcoin Prices Drive Gold Demand

[heading]High Bitcoin Prices Drive Gold Demand[/heading]

Gold investors might have been put off by Bitcoin in recent months. After all, it was supposed to be their safehaven of choice – one tried and tested throughout history – which was to preserve their assets against dollar collapse…not some other, tangential investment.

But, since gold peaked in the fall of 2011, it and silver have both posted long-term corrections, even crossing over into bearish territory, with interest in the topic, according to Google Trends, at an all-time low.

In the meantime, Bitcoin has revolutionized money.

When Bitcoin burst on the scene, many goldbugs embraced it. However, many did not, arguing that gold was not a sterile asset; that is, that it was not backed by any tangible value. But, bitcoiners contended that, like gold, bitcoins had uses, and they served as stores of value.

And goldbugs and bitcoiners, in some ways, agreed to disagree.

And now, five years into the Bitcoin experiment, it has proven not only a hedge against economic volatility, but a way to make lots of money.  Eric Sprott, who has said that silver is the investment of a lifetime, might have to admit that, silver could turn out to be the second best investment of a lifetime.

To be sure, goldbugs might be able to find a bit of forgiveness in their hearts for Bitcoin after this anecdote: high Bitcoin prices drive gold demand.

As you can see by the following chart, whenever Bitcoin crosses into the +$250 price range, search queries “bitcoin for gold” increase exponentially.

The trend begins in the spring of 2013. This is when Bitcoin popped up for the first time on mainstream radars in the aftermath of Cyprus’ bail-in. Bitcoin then soared to an all-time high of $266. That is when the search query “Bitcoin For Gold” really takes off.

Then, the same trend appears this fall, as Bitcoin began rising from its support of $120 to it’s current price of $365.

bitcoinforgold

3 Comments on "High Bitcoin Prices Drive Gold Demand"

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