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What Warren Buffet’s Barrick Gold purchase means for Bitcoin Price

What Warren Buffet s Barrick Gold purchase means for Bitcoin Price

Bitcoin price and its correlation with gold are increasingly becoming a topic of research. The news of Warren Buffet buying gold means many things in 2020, especially when the world markets are upside down. Buffet’s conglomerate Berkshire Hathway announced that it had bought Barrick Gold, a Canada-based gold firm. At the same time, it has sold its holdings of Goldman Sachs.

Now, when a large investor such as Warren Buffet invests in gold in these troubled times, it sends out many mixed signals. Max Keiser of Heisenberg Capital thinks that such a move can send Bitcoin price soaring above $50,000 since it supports the safe-haven principle. If large investors are stocking up gold, other safe-haven assets will also come into play.

Will Bitcoin price rise in tandem with gold

The recently released report of Berkshire Hathway quarterly figures shows that the ace investor has cut down positions in the banking sector. The report shows that shares of major banks, including Wells Fargo and JPMorgan Chase, were sold in large quantities. It highlights that Buffet is wary about banks and is cutting down investments in the banking sector.

On the other hand, Buffet purchasing Barrick Gold means that he is looking for safe investments to add to his portfolio. Barrick Gold registered an impressive gain of 45 percent in 2020, and its growth is mimicking gold itself.

Now, where does Bitcoin price come into play in all this investment scene? Max Keiser thinks that Buffet’s gold investment and Bitcoin are connected. He is confident that if gold rises further, the same sentiment will also benefit Bitcoin. So, its more of a safe-haven play analogy.

Bitcoin is digital gold of the future

Many investors called Bitcoin as ‘digital gold’ considering its recent performance. When a prominent investor prefers adding large quantities of gold in his portfolio, the world will take notice. Global investors would certainly increase gold allocation in their portfolios. For example, even if gold allocation rises to 5 percent, this would mean 1 percent allocation to Bitcoin. Such allocation figure puts Bitcoin price at $50,000.

Bitcoin has shown a significant correlation with the yellow metal in these pandemic-ridden times. So, it remains to be seen how Buffet’s gold investment does to Bitcoin price.

Gurpreet Thind

Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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