A major Canadian gold producer said while “investors are flocking to Bitcoin in record numbers,” “digital gold” will never replace the precious metal itself.
Sean Boyd, Chief Executive Officer of Agnico Eagle Mines Ltd., said in an interview on Friday that while his company is aware of board-level competition from cryptocurrencies, it is not an immediate threat.
“I think you need to have these conversations, but you are looking at the liquidity in Bitcoin. It’s a small market, ”said Boyd. “Sure, you may get other cryptocurrencies, but there are still security issues with cryptocurrencies. So we don’t see Bitcoin displacing gold and the importance of gold. “
Boyd’s comments come from the fact that Bitcoin prices are rising to an all-time high, which is being borne not least by private investors. Bitcoin hit a new high of $ 48,930.85 on Friday.
However, the surge in investor interest has been answered with new warnings of a possible bubble.
Bank of Canada Deputy Governor Timothy Lane called Bitcoin’s recent run “speculative mania” during a speech on Wednesday. Lane said in his remarks that the rise of Bitcoin is taking place in an atmosphere where a high-profile tweet is enough to trigger a sudden jump in price.
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David Rosenberg, chief economist and strategist at Rosenberg Research & Associates, discusses the latest trends in the market with BNN Bloomberg, including the rise of Bitcoin.
Bay Street veteran David Rosenberg has also hoisted a red flag as to whether it is possible to tell what Bitcoin is actually worth.
“Estimating it is nearly impossible,” said Rosenberg, chief economist and strategist at Rosenberg Research & Associates Inc., in an interview on Wednesday. “All you really have to do is look at the price and the chart, and you can see that it is a massive price bubble. The diagram itself tells you that. “
Boyd said Bitcoin should be linked more to the paper currency than the precious metal.
“I think the area of concern should be paper currencies, as well as central banks and paper currencies. I think this is the bitcoin and digital currency competition, ”he said.
He added that he believes gold, which is now valued at over $ 1,800 an ounce at new record highs in the markets, will always be a necessary part of portfolio diversity.
“It still plays an important role in people’s portfolios,” Boyd said. “That won’t go away just because there is another option in terms of digital currencies.”