For as long as most people can remember, gold has been one of the safe haven assets. That is no longer the case, as demand for gold is dwindling. Moreover, the long-expected investment returns from gold remain out of reach. For a speculative tool, bullion is one of the worst ROIs right now, which is not surprising. With weak pricing and no surge in demand, we are on the brink of finding the next go-to asset. That asset can very well become Bitcoin or any other major cryptocurrency.
It is evident the expect bullion value returns are not materializing. Nor will they anytime soon, as the pricing structure is on very wobbly legs. There has been very little upward momentum in the gold industry, as the opposite effect is more prevalent. Unconventional monetary policy and the growth of cryptocurrencies have put bullion on the back burner. It simply doesn’t hold the appeal it once used to and reclaiming this spot will be very difficult.Investors are virtually numb when it comes to gold, which is a very troublesome development for all bullion speculators.
Bullion is Outclassed by Cryptocurrencies
It has to be said, interest in gold is no longer there. More specifically, the interest now versus ten years ago is very different. The emerging alternative investment opportunities are taking the spotlight. Especially those tools not linked to traditional institutions or related services. Cryptocurrencies are in high demand on a global scale. Bitcoin shows more bullish momentum in this month alone than gold has throughout the past 18 months. It is evident investors are taking notice and looking for the best bang for the buck.
Additionally, there are the unconventional monetary methods by central banks. Asset prices have no link to underlying fundamentals whatsoever. The value of gold is based on supply and demand, more than anything else. Unfortunately, demand for gold simply isn’t there in any industry. Risk assets, such as precious metals, will continue to decline in value or hover around the same price for prolonged times. It is a very dire situation for people with their life savings in gold, but there isn’t much to be done.The bullion market is tightly regulated and controlled, restricting most gains to nearly zero.
Smart investors have seen a trend coming for some time now. They started diversifying their portfolio with cryptocurrency years ago. Although bullion will always have its place, it’s far less of a risk mitigator than it should be. Then again, it’s also one of the lesser volatile assets to hold right now. Cryptocurrencies are taking center stage, despite some wild price fluctuations now and then. An interesting development that will shake up the financial markets quite a bit for some time to come.
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