The leading cryptocurrency Bitcoin may have momentum on its side, but some experts still like gold, which plays in the hands of ETFs like the VanEck Vectors Gold Miners ETF (GDX) and VanEck Vectors Junior Gold Miners ETF (GDXJ).
“My vote would be for gold because it has thousands of years of a historical record as a store of value, has one-fifth the volatility of bitcoin, and doesn’t face the same competition risk,” said David Rosenberg of Rosenberg Research, former Chief Economist and Strategist for Merrill Lynch Canada and Merrill Lynch in New York. “The day that Queen Elizabeth trades in the five pounds of gold in her crown for crypto is the day I’ll shift course.”
GDX seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE® Arca Gold Miners Index®. The index is a modified market-capitalization weighted index primarily comprised of publicly traded companies involved in the mining for gold and silver.
GDXJ seeks to replicate as closely as possible the price and yield performance of the MVIS® Global Junior Gold Miners Index. The index includes companies that generate at least 50% of their revenues from gold and/or silver mining/royalties/streaming or have mining projects with the potential to generate at least 50% of their revenues from gold and/or silver when developed.
Gold Still the Safe Haven of Choice
It’s difficult to deny gold’s long-standing safe haven preference for investors. Bitcoin has yet to prove its mettle given its relatively short history as a storage of value or investment, according to some analysts.
“Gold has long been considered to be the safe-haven asset of choice, and, while bitcoin is ‘the new kid on the block,’ it’s debatable that it will eat into gold’s market share for a number of reasons,” said Sylvia Carrasco, CEO and founder of the gold exchange platform Goldex. “Bitcoin and gold both have significant advantages over fiat currencies because neither can be diluted or debased.”
“There is a possibility that bitcoin could one day cease to exist through hostile legislation,” Carrasco added. “Some bitcoin derivatives have already been banned. Companies such as Facebook who have attempted to start crypto have been prevented from doing so. So, while bitcoin is a more recent form of investment that is certainly receiving a lot of hype, gold has retained its value through centuries. Whether bitcoin will offer the same level of longevity is highly questionable.”
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