Rosenberg Strategist: Traditional Investors Are Putting Money into Bitcoin Instead of Gold

David Rosenberg, chief economist and strategist at Rosenberg Research, revealed that Bitcoin is eating into gold’s market share as mainstream investors shift money from precious metals to the leading crypto asset.

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Rosenberg told Fox Business that instead of allocating money to gold, traditional investors are opting for the No. 1 cryptocurrency by market cap, Bitcoin.

“The bitcoin mania does seem to be taking away some of the money that would normally go into gold.”

The chief economist at Rosenberg Research added that Bitcoin has reduced the value of gold by about 10% from its current value of $1,800 per ounce. According to Rosenberg, if traditional investors did not flock to Bitcoin, the price of gold would increase by at least $200 per ounce.

Blu Putnam, managing director and chief economist of CME Group, recently expressed a similar view.

In a Bloomberg Markets and Finance video interview, Putnam warned that gold’s market demand driving its real output puts it at a disadvantage relative to Bitcoin.

“ Bitcoin seems to be an emerging competitor to gold. Considering the current gold price range, increased gold production is likely to become a trend in 2021. In contrast, according to Bitcoin’s rules, Bitcoin’s supply is strictly controlled.”

Putnam added that gold is becoming increasingly correlated with stocks, making it less attractive to those fleeing risk.

“We also note that gold may be losing its appeal as a hedge against global political risk. Between 2017 and 2020, gold’s rise and fall in price appear to be directly correlated to the Fed’s policy shifts rather than any other factor. As stocks react to the same drivers, the relationship between gold and equities has tended to be more closely linked, weakening gold’s safe-haven appeal.”