Bitcoin has failed to break out of its recent trading range which was formed at the start of the year and according to 2 analysts, the reasons are gold, and just an overall lack of demand.
When there was big volatility to be had in bitcoin, even traders who would normally not favor cryptocurrencies wanted a part of the action in order to obtain quick profits but now that is over for the time being, the same traders seem to be sitting on the sidelines.
Some say this avoidance of crypto currencies may become a permeant factor as the novelty wears off,
“We have long been skeptical of cryptocurrencies’ value in most environments other than a dystopian one, characterized by a loss of faith in all major assets (dollar, euro, yen, gold) and in the payments system,” said John Normand, head of cross-asset strategy at JPMorgan Chase
“Developments over the past year have not altered our reservations about these assets’ role in global portfolios, even if their novelty value can remain high indefinitely.” He added.
The sudden interest in gold may also be part of the reason bitcoin ihas failed to make any significant gains this year and it seems as id the tables have turned with bitcoin leading the charge last year and now it is gold which may be at the formers expense.
“I do think that Bitcoin pulled a little bit of demand away from gold last year, in 2017. Interestingly, we just polled 4,000 bitcoin investors and their number one investment for 2019 is actually gold. So gold lost to bitcoin and now it’s going the other way.” Said Jan Van Eck, CEO of Van Eck Associates
Not only have we lost all liquidity on the underlying [commodity] but truly outside of the existential blockchain argument, it’s been very difficult to argue store of value which is really what we started hearing about,” said Seymour. “Gold is a store of value and there’s no disputing that.”
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