Saturday , 19 September 2020

Bitcoin Could Make Things Worse For Gold Before They Get Better (+2K Views)

Bitcoin trading is totally bonkers and it doesn’t look like it’s going to calm downbitcoin 2 anytime soon. It’s morphed from an underground tech-geek trade to the biggest market mania we’ve seen in decades.



The original article by Greg Guenthner has been edited for length and clarity to provide a fast & easy read. For all the latest – and best – financial articles sign up (in the top right corner) to receive’s free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.

…Bitcoin futures blasted higher right out of the gate last night. They triggered not one but two trading halts as it marched to overnight gains of more than 25% on the CBOE. Reports of the CBOE site going down started flooding in during the first hour of trading. Coinbase, a popular bitcoin trading site, also crumbled under the pressure last night.

Stock Market

Bitcoin news is pushing stock market stories below the fold. Despite the market’s incredible performance this year, equities are starting to take a back seat to cryptocurrencies. Then there’s gold.


Bitcoin is stealing gold’s thunder… Debates over stores of value in the event of societal collapse have shifted from gold to bitcoin. Bitcoin searches are more popular on Google than gold. No one seems to care about the Midas metal anymore…

Gold Mining Stocks

While new, smaller cryptocurrencies and “initial coin offerings” continue to gain attention, the market’s more speculative gold mining stocks are taking a beating. The VanEck Vectors Gold Miner ETF (NYSE:GDX) can’t keep its head above water. GDX is down more than 15% over the past three months.

Bottom line: Bitcoin is killing gold right now. We have no idea how long crypto-mania will last but, if the excitement surrounding bitcoin continues through the holiday season, we suspect things will get worse for gold before they get better.

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  1. One can never know when a bubble will pop. One thing we did learn from the derivatives and hedge funds and credit default swaps and other virtual financial instruments, when those virtual financial instruments fail then they will suck money out of the bricks and morter real world economy.

    We don’t know when the bubble will pop on bitcoin but one thing is guaranteed. The crash of Bitcoin or other virtual financial instrument will crash everything else as the Bitcoin owners lose their money and become the newly poor. My guess is that Bitcoin wont crash until it well surpasses the peak of the derivatives and credit default swaps and hedges, as well as, have greater global reach of 2007 crash….

    This parabolic version of virtual money can and will never replace gold or fiat currency with this level of volatility. Financial markets can tolerate fluctuations from monetary trade and stock trade but neither people nor nations can tolerate parabolic volatility of cryptocurrencies. Smart nations will look for ways to wall off the damage a crash in Bitcoin can do to Bricks and Mortor real world economies as Glass Steagal with the 1929 crash. Those that don’t will experience the great sucking sound when the virtual world sucks the wealth out of the real world