Gold vs. Bitcoin: Seven Days of Corrections

What an insane 7 days in the world of alternative investments!

First it started with the inevitable deflation of bitcoin prices from their unsustainable rise to $260 to about $50 in just over 24 hours. This prompted a huge ‘i told you so’ rant all over the media with everyone bashing bitcoins without even knowing what they are in most cases. It did, however, provide bitcoins with massive media exposure just enough to gain the attention of Bloomberg and CNBC; mission accomplished. I actually heard an anchor this morning report the spot price of bitcoins on Bloomberg radio quickly followed by a story on why gold fell so hard.

Now about gold. Just 4 days ago, in the midst of the media frenzy about the collapse of bitcoin prices, gold takes a nose dive from it’s lackluster levels stuck around $1550 to an eye-opening $100 drop to $1450 territory, then another plunge in the Asian sell-off down to around $1330. All of a sudden bitcoins became an afterthought and the spotlight was back on the perennial precious metal that everyone loves to hate.

Bitcoin’s sell off was supposedly caused by profit taking and panic selling while gold’s sell-off started when Cypress said it needed to sell it’s gold to pay its copious debts off, then after Mario Draghi decided to OK that lovely idea, gold went into panic sell mode. To be completely frank, it’s not really completely clear what caused gold and bitcoins to spiral back down to Earth nearly at the same time but I feel like it opens the door to some serious pro-government conspiracy theories.

Let’s see what the next week brings on before I make any pointless predictions from here.

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