Quick thoughts on BTC vs Gold

Gold is outperforming Bitcoin and we don't think it is a temporary market glitch

Last Thursday we had the opportunity to join Jim Cramer on the floor of the New York Stock Exchange to film an episode of Mad Money. It was, without a doubt, the most amazing experience I've had in my commodity career. On the show, I shared the gold analysis published in a recent issue of the DeCarley Perspective on the price of gold and its ability to rally should the interest rate market settle down and the US dollar continue its downtrend. 

Despite years of hoopla, cryptocurrencies, and Bitcoin, in particular, is a relatively new asset. Not surprisingly, the Bitcoin market has struggled with an identity crisis. We've seen the coin identify as a transactional currency, then the bigger and better version of gold. Later it traded as a tech stock, and most recently, it has found a home as a portfolio diversifier. It is no longer trading with high positive correlations with beta stocks nor is it trading inversely to gold or the dollar. For proponents of Bitcoin, its newfound stability and independence from other asset classes is a best-case scenario.

Nevertheless, it has yet to prove to be a speculative asset that can truly compete with the stock market (which often pays dividends with more reasonable levels of volatility) and gold, which can be physically owned and bartered if the world as we know it no longer exists. Technology is great, but it isn't failsafe. Nevertheless, with the crypto sector in its infancy, the jury is still out on the final verdict. In the meantime, gold appears to be winning the marathon in the race to a risk diversifier rather than a risk enhancer.