Jim Cramer Claims Gold Is Falling As More Investors Discover Crypto
A strange phenomenon occurred this week in global markets as gold rates moved lower amid a stronger rumor of coming US stimulus and strong stock markets.
Even though many hoped for additional US fiscal stimulus under incoming President Joe Biden’s new Democrat administration, it was strange to see gold take a hit. Given that stimulus is on the horizon, you would expect money to flow into the ultimate safe haven gold. Instead it took a hit.
As we’ve said before this year, the more money is being printed by central banks, the more investors will look for safe havens to park their funds. Given that gold has risen some 25% in 2020 versus Bitcoin’s 400%, that could be a very easy choice. If gold starts to take hits instead of rising, that choice becomes ever more simple.
Biden preparing $3 Trillion Stimulus— Ivan on Tech (@IvanOnTech) January 9, 2021
It will take the stock market and especially #Bitcoin to insane levels already in February...
Multiple market commentators have come to the same conclusion in fact. Charlie Morris, the founder and CIO of ByteTree Asset Management said:
With bond yields up and inflation expectations down today, gold has taken a hit. This justifies a $50 sell off, but price is down $120. I’d attribute the excess to flows moving towards #Bitcoin
either it is not as chaotic out there so gold doesn't jump or it's all going to crypto! But remember there has been no flight to quality (treasurys) https://t.co/nExv3O7dRm— Jim Cramer (@jimcramer) January 8, 2021
Mad Money host Jim Cramer responded likewise to a question on social media. When asked whether or not he was surprised that gold hadn’t been rallying in the first week of January, Cramer stated:
Either it is not as chaotic out there so gold doesn’t jump or it’s all going to crypto! But remember there has been no flight to quality (treasuries)
Ultimate gold supporter (and one of the most influential Bitcoin movers on social media as well) Peter Schiff also felt the need to say his bit about it, claiming that:
Bitcoin has risen from pennies per coin to over $40,000 yet it has not disrupted anything. Neither central banks nor governments have lost any power. This will be true no matter how high the price of Bitcoin rises. But $10,000 gold would be enough to collapse the fiat system!
Ambitions for gold’s role
Be that as it may, it could potentially be very significant that in the first week of the new year, a decoupling in investment flows seems to have arisen between gold and Bitcoin.
Even the Financial Times headlined the same question this weekend, asking in an article entitled:
Bitcoin has ambitions for gold’s role whether Satoshi Nakamoto’s invention can seriously compete with gold as a safe asset for the largest investors? History, regulation and market volatility make that seem improbable, but it is beginning to develop a more important role.
Could the most popular cryptocurrency be about to overtake gold as a safe haven, or is it simply the entrance of new investors (millennials) into a market.
Time will tell.