Bitcoin and Gold Are Monuments To Irrationality
Investors are turning to both assets amid market uncertainty, but digital currency is a strange idea of a haven and the metal’s track record is patchy.
Fool’s gold.
Photographer: Chris Ratcliffe/BloombergWith worries about a currency war growing and bond yields collapsing, investors have reached for their usual haven of gold. Only this time it has a friend (as my colleague Tim Culpan wrote this week): Bitcoin.
Gold’s dollar price has risen 7% this month, Bitcoin’s by 18%. This apparent use of the two commodities as companion ports in a storm will be music to the ears of cryptocurrency boosters like Mike Novogratz, who has argued that “Bitcoin will be digital gold.” The self-justification of gold bugs and crypto fanboys are indeed starting to sound remarkably similar: That they both offer the prospect of sound and stable repositories of your cash at a time when central bankers are printing money like it’s going out of fashion.