Jake Klein, Evolution Mining’s executive chairman said the volatile nature of Bitcoin may divert investors attention to Gold, while also saying crypto is not mature enough to deliver the established safe haven assurance of the latter.
According to Jake Klein, CEO of Evolution Mining, an Australian gold mining company, crypto price volatility will make gold a considerably more appealing option.
Despite Bitcoin’s gains outstripping gold by many orders of magnitude in the last decade, Klein claimed to CNBC on Thursday that Bitcoin (BTC) is still a long way from giving the long-standing security associated with gold from a hedge investment viewpoint.
Crypto is still a speculative play, according to Klein, and the accompanying volatility in such markets will drive investors back to gold.
The volatile nature of bitcoin pricing is a common criticism levelled against cryptocurrencies as an asset class. BNY Mellon subsidiary Insight Investment’s Francesca Fornasari stated in June that Bitcoin’s price volatility, among other concerns, would render it unsuitable for institutional investors.
Following BTC’s volatile price action in June, when the annualized 30-day volatility skyrocketed to a one-year high above 117 percent, data from Woobull Charts puts Bitcoin’s 60-day volatility at 11.69 percent.
Since the beginning of the year, gold has had a choppy price performance, with fluctuations as high as $200 between June and August.
Despite Klein’s assertion that gold is still superior to Bitcoin, the miner believes the two assets can coexist, dismissing concerns that Bitcoin will eventually dethrone gold as a safe haven asset.
Bitcoin has outperformed gold in terms of returns over all time periods since its inception. Indeed, gold’s 10-year returns have lately turned negative, whereas Bitcoin’s 10-year performance is over 360,000 percent.
Using the previous year as a benchmark also yields comparable results. Since August 2020, gold has dropped 8%, whereas Bitcoin has increased by 300 percent since August 20, 2020.
