Jake Klein, the CEO of the Australian gold miner Evolution Mining, believes that the high volatility of cryptocurrencies makes the precious metal a better alternative.
Accordingly, Klein argued in an interview with CNBC on Thursday that Bitcoin (BTC) is still a long way from the status of a hedging instrument that gold has, even though the cryptocurrency has achieved multiple returns in recent years.
Klein believes that cryptocurrencies are still primarily a speculative asset class, which is why the associated volatility, i.e. the violent price fluctuations, inevitably lead investors back to safe gold.
The unstable price development of cryptocurrencies is often brought up as a weighty point of criticism of the asset class. For example, Francesca Fornasari of Insight Investment, a subsidiary of BNY Mellon, said in June that it is above all the volatility that makes Bitcoin unsuitable for institutional investors.
As the data from Woobull Charts shows, the 60-day volatility of Bitcoin is only 11.69%, while for the last 30 days it has been more than 117%.
Gold was also not entirely stable between June and August, with fluctuations of up to US $ 200 during this period.
Although Klein sees gold at an advantage over Bitcoin, the expert at least admits that both investment products can peacefully coexist. The thesis that the cryptocurrency could overtake the precious metal in the future is vehemently contradicted.
As reported by Cointelegraph, Bloomberg analyst Mike McGlone last said that Bitcoin is about to replace gold.
At least in terms of returns, Bitcoin is clearly ahead in every time frame. Rather, the 10-year return on the precious metal has recently even turned negative, while the cryptocurrency has achieved a whopping 360,000% gain over the past ten years.
Compared to the previous year, the same picture emerges, because while gold has been 8% in the red since August 2020, Bitcoin has shot up 300% since then.