As the bitcoin rollercoaster plummets earthward, holders of the digital currency are jumping off to trade their holdings for gold, preferring a proven store of value.
Frankfurt-based CoinInvest saw sales of gold coins jump fivefold on Tuesday, January 16, as bitcoin dropped 23 percent. The firm sold almost 30 kilograms of gold, worth $1.2 million.
“A hell of a crazy day,” is how CoinInvest Director Daniel Marburger described the rush into gold to Bloomberg. “Emails and phones did not stand still with customers asking how they could turn their crypto into gold.”
An attraction of bitcoin is the fact that it is not a fiat currency that can be controlled or manipulated by a government. The same is true for gold, but it is vastly more stable, and is a tangible asset that one can physically hold. As gold steadily climbed from mid-December through mid-January, bitcoin plunged from $19,000 to $10,000.
A London gold dealer who accepts bitcoin as payment via a third party reports young clients come to his shop carrying laptops that display their bitcoin holdings, eager to convert the crypto currency into a tangible asset.
“Bitcoin is a bit of a lobster pot – it’s easy to get in, but hard to get out,” Ross Norman told Bloomberg. “Gold also offers investors 4,000 years of history as a store of value, and that’s looking quite appealing right now.”