(Kitco News) The financial market has enough demand to sustain both gold and bitcoin as safe-haven assets, according to Digix co-founder and COO Shaun Djie.
“Gold and bitcoin will outperform a lot of asset classes this year,” Djie told Kitco News, noting surging demand for inflation-hedge assets amid massive money printing and currency debasement fears.
And even though the gold space has been quiet this past few months, especially when compared to bitcoin, Djie sees the precious metal climbing back up to $2,000 an ounce by the end of the year. “I won’t be surprised to see bitcoin trading at $100,00 by the end of the year. For gold, I wouldn’t be surprised to see it close to $2,000 level again,” he said.
The reason for his optimism is uncertainty, which is still very much in the air. Djie warned that the pandemic would not be over this year.
“We are unlikely to see everyone in the world vaccinated and borders re-open for tourism this year. This means that more uncertainty is still ahead,” he said. “I would not be surprised to see a severe market correction toward the end of the year. Complete economic recovery will take longer than four years.”
This is at a time when the stock market is already overvalued and has a new wave of retail investors piling money into equities in search of better profit than their savings account.
“All the excess liquidity out there has been flowing to highly speculative assets. The stock market is overvalued today. We are seeing new all-time highs almost every other week,” he added. “People are finding the idea of investing a much less daunting one than two years ago in light of the social media and all the commentary out there.”
Bitcoin will not displace gold
Gold and bitcoin can both rise as investors seek better stores of value. “I don’t think one is meant to displace the other. Gold has been around for a lot longer. And the physical aspect of it would still be key and attractive to investors out there,” Djie said.
Bitcoin attracts a different kind of investor than gold — the new digital crowd looking for safety, he described.
“The crypto world appeals to the people who have accelerated digital learning over the past 12 months. Since the COVID pandemic started, more people started to get involved in the stock market via their mobile phones. The whole wave of self-education has proliferated the understanding of bitcoin. And people are buying bitcoin on their own as a store of value,” Djie explained.
This does not impact gold, which will continue to provide an attraction. “The market is sufficient enough to contain both asset classes. One would appeal to more to the digital crowd and the other more to the physical crowd,” he said.
One more thing to consider in the gold versus bitcoin debate is all the regulation hints coming from U.S. officials, Djie added. “Gold will see a lot more action as regulators and different investors chime in on the narrative bitcoin. Gold will likely resume its…