Wild swings in cryptocurrencies will eventually push Bitcoin investors to return to gold, says the chairman of the board of directors of gold mining company Evolution Mining.
Jake Klein said Bitcoin still had a “long way to go” before it demonstrated the kind of “longevity and security” that gold has shown investors over the past 70 years.
“An enormous amount of speculative money” is being spent on cryptocurrencies, he told CNBC’s “Squawk Box Asia” on Thursday.
“I think the volatility in the crypto space will ultimately lead people to go back to gold,” Klein said.
The price of gold fell last week and analysts say it will likely continue to fall. Hedge fund manager David Neuhauser told CNBC earlier this week that the drop in gold prices is now a “massive buying opportunity” for investors.
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Still, Klein said the two can coexist – there are ways for gold to sit next to Bitcoin, as opposed to Bitcoin, which poses a threat to the precious metal.
Bullish investors view Bitcoin as digital gold and a hedge against inflation and expect the cryptocurrency to appreciate over time.
American investor Tyler Winklevoss, who founded Winklevoss Capital Management and the Gemini cryptocurrency exchange, said last year that “Bitcoin is Gold 2.0” – and that it will disrupt gold.
Billionaire investor Kevin O’Leary said in April that “Bitcoin will always be the ‘gold'”. Ethereum will always be the ‘silver’. ”
However, there are other investors who disagree.
Hedge fund manager Ray Dalio said earlier this month, despite owning an unknown amount of Bitcoin, “If you put a gun to my head and said I can only have one, I would go for gold.”
Bitcoin topped $ 48,000 over the weekend – its highest level since May. However, on Thursday morning during the Asia hours, it reduced some gains to the last trade above $ 44,000, according to CoinDesk data.
The weekend surge followed a sell-off in June and July when Bitcoin fell below $ 30,000.
The gold price also fluctuated between gains and losses this year. From a level above $ 1,900 in January, prices fell to over $ 1,700 in March.
In June, the precious metal climbed back to nearly $ 1,900 before returning to above $ 1,700 in August.
– CNBC’s Arjun Kharpal and Jade Scipioni contributed to this report.