Bitcoin, the heavyweight of the cryptocurrency world, has billed itself as digital gold—a safe haven for investors to park their assets.
Apparently that image is having an impact. While Bitcoin’s status as a potential substitute investment to the shiny precious metal with thousands of years of human history is debatable, some investors are foregoing physical gold for its significantly younger brethren.
As Bitcoin prices inched toward an all-time high price above $19,500 in December, Byron Salamida, 48, of San Diego took some of his gold coins and decided to sell them at a local precious metals dealer. He planned to take the cash and purchase cryptocurrencies including Bitcoin—as he had been doing for the past two years. After all, while his gold coins were simply sitting there, with roughly the same value minute after minute, the price of the cryptocurrencies he owned was shooting up—seemingly into the stratosphere.
“Why keep something in gold? It’s stable. But why keep it in gold when it stays in a $100 range, when I could buy Bitcoin when it is increasing everyday?” Salamida said.
He was surprised to find when he got to the precious metals seller where he planned to offload his wares that he wasn’t the only gold owner who had the same idea.
The shop owner bought the gold from Salamida for about $5 to $10 below spot price, citing low demand. The owner mentioned he had noticed a recent surge in customers who were selling gold in a bid to buy Bitcoin.