Bitcoin price plummet sees investors swap
cryptocurrency for solid gold
Jumpy bitcoin investors turned to traditionally safe assets such as gold
or register with your social account, would like to receive lunchtime headlines Monday – Friday plus breaking news alerts by email. Anxious bitcoin speculators have sought refuge in gold amid a price plunge in the cryptocurrency. Sales of gold coins surged fivefold last week at Frankfurt-based trader CoinInvest, with phones ringing off the hook and emails pouring in from nervous investors looking to cash out.
CoinInvest director Daniel Marburger told the Standard the surge in demand has continued. "It is a constant flow into gold," he said. Although bitcoin recovered to $11,700 (£8,430) on Monday morning after plunging to $10,000 (£7,187) last week, investors are still nervous, according to Mr Marburger. "Bitcoin could not make a clear counter-trend last week and gold is on a run at the moment with 7 per cent gains since its December lows," he said.
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According to Mr Marburger, speculators are seeking safety from the "crazy volatility" of the cryptocurrency, whose value has collapsed 40 per cent in the past month. "Gold has a sustainable track record over decades and is an asset you actually hold in your hands. People are looking for something to touch rather than an investment where only the belief in it is the value," he said. "Bitcoin has proven one time more than it is based on speculation." Some experts maintained that the cryptocurrency will stabilise in the longer term.
Benjamin Dives, CEO of London Block Exchange, which plans to launch a direct sterling-to-bitcoin exchange, said bitcoin's volatile week was not a cause for concern. "[Some investors] may not be comfortable with the markets moving [downwards] and so are ‘cashing out’ to invest in traditionally stable assets, such as gold," he said. "These people are likely new to cryptocurrency exposure or, as is standard in the investment industry, were just ensuring profits in the short term. The result for cryptocurrencies is a dip in the market, which is natural and healthy."
He added that the exchanges actually prove the cryptocurrency's concrete value. "As the market matures, we can be sure of more stability in the future and that is when these investors will be looking for a re-entry point. Unfortunately for them, their transition to gold may cause them to miss out on the gold rush," he concluded. A year ago, in January 2017, one bitcoin was valued at £900. Many economists remain sceptical about its worth.
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