Bitcoin electrified the commodities markets last year, but the “Commodities King” does not believe the bitcoin price’s 2018 performance will be nearly as stellar.
‘Commodities King’ Predicts a Bitcoin Price Crash
Despite ending the year on a moderate decline, the bitcoin price rose more than 1,200 percent in 2017. This historic march turned many cryptocurrency skeptics into outspoken believers and earned bitcoin a seat on Wall Street futures markets. However, commodities expert Dennis Gartman remains unconvinced.
“I’m very bearish on bitcoin, I think it’s one of the silliest ideas I’ve heard in a long time,” he said. “To be separated from the brilliance of the blockchain, [it makes even] tulips in [17th] century Holland look almost like a quiet, well-demeanored market,” Gartman, a four-decade financial market veteran, said during an interview on CNBC.
The “Gartman Letter” editor and publisher expressed confidence that the cryptocurrency markets would cool off in the near future, forcing the bitcoin price below $5,000 — a more than 60 percent decline from its present value of $13,570.
Bitcoin Money Will Flow Back to Gold
Gartman added that, when the cryptoasset crash occurs, he expects money to flow out of bitcoin and enter the gold markets.
“When bitcoin falls, and it shall, it’ll trade under $5,000,” he said. “Whether it does it next week, next year, six months from now, it’ll happen. And then I think we’ll find at the margin money that had moved into bitcoin and away from gold will move away from bitcoin and into gold.”
As Strategic Coin has reported, many cryptocurrency investors — particularly younger ones — view bitcoin as “digital gold,” a replacement or complement to the asset that has served as a ubiquitous store of value for thousands of years.
The gold price rose more than 10 percent during 2017, but some analysts believe that the surging bitcoin price led investors to purchase cryptocurrency in lieu of gold, dampening the yellow metal’s rally.
But although he forecasts an ominous future for the bitcoin price, Gartman said that he does not intend to put his money where his mouth is and bet against it on the bitcoin futures markets established by CME and CBOE.
“It makes no sense whatsoever. I won’t trade it. I won’t be long of it. I won’t be short of it,” he said.