Bitcoin strikes gold again

October 9, 2018

Bitcoin back above $7,000 has crypto bulls believing in the rally again.  Many crypto experts believe the leading cryptocurrency’s long-term move could be stratospheric.

Such a move will be fueled by a maturing crypto market that could lure investors out of physical gold and into “digital gold,” says Gabor Gurbacs, Director of Digital Asset Strategies at VanEck/MVIS.

“Gold today has around $7 trillion outstanding. If you take, say 5 to 10 percent — I’ll let everyone do the math — bitcoin has upside,” he explained on CNBC’s “Futures Now” on Thursday.

Bitcoin currently has a market cap of $128 billion, according to Coindesk. If 10 percent of the gold trade were to shift into bitcoin it would more than triple its market cap, by Gurbacs’ calculations.

“Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold (bitcoin),” he added.

Before bitcoin can take off, the crypto market first needs to evolve to address a few topics of consternation to institutional investors, says Gurbacs. He counts marketwide pricing, valuation, customer protection and compliance as among those issues.

There are 120 different exchanges out there, he says, and often the price of bitcoin changes from platform to platform. His firm VanEck/MVIS is addressing that issue with independent pricing benchmarks.

Gurbacs is optimistic the crypto market can change and mature to mirror more traditional investments.

“We believe that there is sufficient liquidity, pricing benchmarks, and a way to integrate bitcoin into the financial ecosystem that we are used to for ETFs, stocks, bonds and commodities,” he explained.

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