Leading cryptocurrency Bitcoin, dubbed “digital gold,” is having astronomical gains this year, but the precious metal itself has been maintaining its status as a go-to safe haven with its latest price increases as well–who comes out on top?
Bitcoin recently broke through the $13,000 price barrier, rising to its highest level in 17 months on Wednesday. The heavy volume is helping Bitcoin rally to almost 60 percent in June alone.
“While this rise in volume has come from increased activity among our usual buyer base of hedge funds and family offices, an interesting new buyer group has emerged for us – endowments of private schools. This new group helps highlight how Bitcoin and crypto adoption is spreading,” said Michael Moro, CEO of digital currency trading platform Genesis Global Trading.
Helping to spur interest in Bitcoin is Facebook’s digital currency project. This news is setting the cryptocurrency space abuzz with optimism as Bitcoin reached a high of $20,000 near the end of 2017 and fell over 70 percent since, but is climbing back to prominence again following this news.
A year ago, the plan for Facebook to roll out its own form of cryptocurrency was set in motion when the company appointed former PayPal executive David Marcus to begin exploring the opportunity. Since then, rumors swirled that Facebook was developing its own digital currency that would allow its users to store, trade, and exchange for regular currency via apps like Messenger and WhatsApp.
Gold’s Golden Hour
With the central bank poised to cut rates later this year after remaining steady through the first half of 2019, gold has made a move past the $1,400 price level.
“In line with our expectations, the Fed signaled a dovish turn and a temporary end of the tightening cycle. This pushed the dollar and U.S. real rates sharply lower … While the 10-year US TIPS yield dropped to its lowest level since November 2016 at 0.27%, the DXY dropped to its lowest since March 2019 at 96.63,” Orchid Research said in a Seeking Alpha post on Wednesday.
At its height, cryptocurrency was viewed as “digital gold,” but actual gold bulls can look to ETFs like the SPDR Gold Shares (NYSEArca: GLD) and SPDR Gold MiniShares (NYSEArca: GLDM), while short-term traders can also play the gold market through miners via the VanEck Vectors Gold Miners (NYSEArca: GDX), Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG) and the Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT).
The recent trade war activity may have burned an image of volatility in investors’ minds that could drive their decisions with their portfolios for the rest 2019. As far as being a predictor of what may happen in the global economy, commodities like gold might actually be a more reliable crystal ball.
For investors looking for commodity ETFs as a broad-based play as opposed to just gold, the Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (NYSEArca: BCI) could be a prime alternative.
BCi seeks to provide a total return designed to exceed the performance of the Bloomberg Commodity IndexSM, which is calculated on an excess return basis—-the first of its kind since its inception in the first quarter of 2017. BCI is actively managed and seeks to provide a total return designed to exceed the performance of the index.
With BCI offered at 25 basis points, it also offers a cost-effective solution to providing investors with exposure to commodities. Additionally, there are no K-1 tax documents issued, which is a requirement for investments in partnership interests.
For more trends in the ETF space, visit ETF Trends.