Forget Bitcoin! This TSX gold share has a higher store of value
Bitcoin (BTC) would be no match for gold if you read between the lines the recent statements by Mark Bristow, CEO of Barrel gold (TSX: ABX) (NYSE: OR). Mr. Bristow didn’t mince his words when told FOX Business, “They look like bubbles; they act like bubbles; they smell the bubbles.
The behavior of the world’s most popular cryptocurrency in May 2021 somewhat confirms Bristow’s criticism. From US $ 57,828.05 on May 1, BTC sank 34.7% to US $ 37,772.42 on May 25th. Barrick Gold CEO believes cryptos are made from nothing and therefore have a lower value source than gold.
Significant drop in prices
BTC loyalists have come back to earth following this month’s price collapse. This only proves that the crypto hasn’t lost its volatility, even though it hit a record high of US $ 63,503.46 on April 13, 2021. According to Coin Metrics, BTC was 14 days down in May alone.
Some strategists warn of a wilder trade to come. Peter Berezin, chief global strategist at BCA Research, said: “Crypto markets will continue to face more stringent regulation. He added: “In the short term, the pain in the crypto markets could lead to other speculative assets such as tech stocks.”
For Adam Crisafulli, founder of Vital Knowledge, BTC remains comically volatile. He said, “The economic utility of nothing is changing that quickly.” Even analysts of JP Morgan believe that the worst correction is not yet over. However, any further downward volatility presents a buying opportunity, according to Julian Emanuel, chief equity and derivatives strategist at BTIG.
Gold is not printable
Mark Bristow questioned Bitcoin’s store of value status. He claimed that unlike digital assets, no one can just print gold. It is also wrong for Bitcoin bulls to postulate that Bitcoin is a better hedge against inflation than gold due to the limited supply and mind-blowing growth.
Bitcoin is mined like gold, albeit digitally. Regarding the offer, minors are limited to 21 million. According to the cryptocurrency blockchain explorer Blockchain service, more than 19 million coins are currently in simulation.
According to the United States Geological Survey’s tally, approximately 244,000 metric tons of the world’s most precious metal have been mined to date. For this reason, Bristow said gold continues to be a rarity in itself. Since the turn of the century, gold diggers have not replaced the reserves they have exploited. If ever, he only replaced 50%.
Bitcoin has remained on the rise since the start of the year (+ 30.2%), while Barrick Gold has held up (+ 3.2%). Don’t take the outperformance of the crypto over the gold mining stock as a vote of confidence. The $ 52.6 billion gold mining company has some of the highest quality gold mines and reserves on Earth.
Although BTC appears to be a better investment for potential short-term gain, the chances of losing a lot of money are higher. When it comes to history as a basic building block of global currency, gold has a proven track record, while Bitcoin is highly speculative. So, it is not a contest if you were to pit crypto against gold.
The yellow metal is undoubtedly a stable investment. If you cannot own physical gold, the next best choice is a leading gold stock. At $ 29.79 per share, the mining company pays a modest dividend of 1.49%. Between BTC and Barrick Gold, you need to know which one is the safer choice.
The publication Forget Bitcoin! This TSX gold stock has a higher store of value first appeared on The Motley Fool Canada.
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Foolish contributor Christopher Liew has no position on any of the stocks mentioned.