Bitcoin has managed to keep itself in the spotlight throughout 2017. This cryptocurrency has been up and down in the opinions of investors and regulators, having reached certain high points with the support of major investors.
Old Gold Meets New Money
Now, the Old Mutual Gold & Silver Fund has jumped on the bandwagon, sending Bitcoin’s reputation skyward.
Old Mutual Gold & Silver Fund manager Ned Naylor-Leyland explained that the funding paid into Bitcoin is around 5 percent, beginning in April. The strategy involves using the profits generated by Bitcoin to their very fullest extent so that they can be reinvested into gold and silver assets. Bitcoin is “paving the way for the reintroduction of gold as global money,” said Naylor-Leyland.
Typically speaking, Bitcoin is considered to be a very volatile investment. It regularly swings quite strikingly in random directions, having slid as low as $5,555 mid month when the cancellation of its Segwit2x plans were revealed. Then, last week, it rose by an astounding 40 percent.
What to Make of Bitcoin?
While some investors are working hard to earn greater legitimacy for Bitcoin, others think it is nothing more than a fad or a farce that will fizzle out before it comes into its own. Last September, JPMorgan Chase CEO, James Dimon, indicated that the cryptocurrency was doomed to bomb.
“The currency isn’t going to work,” said Dimon at a Barclays investor conference. “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.” In fact, when asked if JPMorgan Chase trades the crypto, he replied that “If we had a trader who traded Bitcoin I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”
Uncertainty and Volatility Aren’t Stopping Bitcoin
Naylor-Leyland clearly does not agree with Dimon’s take on the crypto. “Bitcoin was explicitly designed to be digital gold,” he said. “So if you’re going to have a small proportion of a fund in Bitcoin, it should be in a gold fund, because that’s exactly the point. It’s about bringing the ownership of disciplined money into the modern world. Bitcoin is paving the way for the reintroduction of gold as global money.”
Regardless of the uncertainty surrounding Bitcoin, it has managed to achieve an eight-fold growth this year, having reached $8,200 last week. Hedge fund manager Mike Novogratz predicts that it will reach $10,000 by the close of 2017.
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