In an interesting turn of events this week, many investors in cryptocurrency began to switch their focus. Following the steep decline in the value of cryptocurrency that began a few days ago, many people became concerned enough to look elsewhere for investment opportunities, primarily gold.
Sharps Pixley, a bullion dealer and subsidiary of Europe’s biggest precious metal bar and coin outlet, has seen trades over a million pounds. According to Director Daniel Marburger, the purchases of gold coins at CoinInvest, a Frankfurt-based company, increased exponentially as the biggest digital asset plummeted.
“Yesterday was a hell of a crazy day. Emails and phones did not stand still with customers asking how they could turn their crypto into gold,” shared Marburger.
With the huge drops in price across the crypto market, for both major digital coins and lesser-known altcoins, many people started to question if a virtual asset can serve as an actual store of value. The answer may have been given by looking at how many investors exchanged digital gold for the real thing.
Ross Norman, a gold dealer in London, began exchanging gold for Bitcoin, using an intermediary, a few months ago. He shared that his customers acted almost embarrassed about their new-found fortunes.
Norman explained, “We are seeing trades north of a million pounds every couple of weeks. It’s been a welcome addition to our business in a period when physical demand from more traditional sources has been subdued.”
He went on to share that one of his customers accumulated 1,000 Bitcoin that he intends to convert into physical metal. Other customers have entered his store with laptops holding Bitcoin they purchased when it was only $1 or less in value. The company does not handle the actual Bitcoin. Instead, customers use an intermediary to make their purchases.
“Bitcoin is a bit of a lobster pot — it’s easy to get in, but hard to get out,” Norman explains. “Gold also offers investors 4,000 years of history as a store of value, and that’s looking quite appealing right now.”
Gold experienced a 7.5 percent increase in value over the past month, and does not tend to experience such extreme fluctuations as digital money deals with on a regular basis.