Jim Cramer, the U.S. TV investment commentator, recently stated that “bitcoin is not going to replace gold anytime soon,” while doing a segment with Carley Garner, co-founder of DeCarley Trading, which analyzed gold’s charts.
In the beginning of the segment, Cramer pointed out that Garner believes bitcoin’s value is the result of perception, not reality, as “bitcoin isn’t backed by anything.” Cramer conceded that his viewers know how he feels about the cryptocurrency – that he thinks its monopoly money, that is – and that those who understand the risks could buy it.
Comparing bitcoin to gold, Cramer added that if we “take away gold’s symbolic value,” the precious metal is still a great conductor, that can also be used to make jewelry. Moreover, he pointed out the gold market is said to be worth about $2.4 trillion, and compared it to the cryptocurrency ecosystem’s $630 billion, neglecting that bitcoin, the first cryptocurrency to exist, isn’t even a decade old yet.
Cramer’s segment essentially leads to one conclusion. Per the TV host:
“The jaw-dropping run in Bitcoin has been very exciting. But gold is not being supplanted by Bitcoin as the go-to alternative to actual currency.”
Gold set for a comeback
During the segment, Cramer looked at gold’s charts, and pointed out gold has dropped below $1,250 per ounce four times this year, and that claims of investors turning to bitcoin have only surfaced the fourth time.
Garner’s chart analysis pointed to various indicators that imply the precious metal is about to surge. In the last four years, gold’s been stuck on the $1,300-$1,000 range, after plunging from a high of $1,800 in 2013. Pointing to the Stochastic indicator, Garner made a case gold making a comeback, as most of the times the indicator showed the market was oversold, gold bounced.
At press time, gold’s trading at $1,260, and according to Garner the precious metal may still fall back to the $1,200 level before bouncing back. If support doesn’t hold, the precious metal may then go as low as $1,100 or $985 before bouncing back.
At the end of his segment, Cramer concluded:
“The charts… suggest that gold might be ready to make a comeback. And while I won’t discourage anyone from buying Bitcoin—just know the risks, know your limitations—I’m with Carley when it comes to the precious metal, not the precious keystroke.”
As reported by CCN, Google searches for “buy bitcoin” surpassed searches for “buy gold,” and as BullionVault’s research director Adrian Ash pointed out at the time, some investors are “being distracted by the noise around bitcoin and other cryptocurrencies,” adding that “that’s made interest from new gold investors the weakest since the metal’s half-decade price lows of end-2015.”