Even as bitcoin prices, and the cryptocurrencies space as a whole, have fallen since their highs in late 2017, interest in digital coins has remained steady, pointing to a renewed uptrend in prices, this according to Frank Holmes, CEO of U.S. Global Investors.
"What's important during this whole year is that even though the price fell 80% to 90% depending on the coins, you had an increase of wallets out of people buying bitcoin, and that's a sign that we're ready for the next bull cycle," Holmes told Kitco News. Holmes added that the last correction in the crypto space was not caused by overleveraging, which contributed to the housing market collapse in 2008, so bitcoin has the potential to recover much more quickly.
"This [correction] can be a year, and we're slowing climbing out of it, and [bitcoin] is becoming an alternative asset class like gold," he said. However, as much as bitcoin can be seen as a form of currency, Holmes noted, it still is not a replacement for gold.
He said that it is not well understood, especially by today's younger generations, why gold is fundamentally important to any economy.
"[Millennials] should do their homework, they should open up a history book on why gold is so significant... why the great 'love trade', that if you love your country you should have gold in reserve. If you have a crisis, your paper money goes down in tremendous value. Gold is what bailed out Britain, getting it over to Canada, and then trading to get weapons from America, it was gold that did it," he said.
Related. A Brief History of Bitcoin
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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.