The cryptocurrency market has been struggling with the volatility that has engulfed it in recent months.
The sector is expanding in part due to the growing interest of young investors in digital assets, which some experts say has displaced the gold obsession of previous generations.
In particular, JJ Kinahan, the new CEO of the North American branch of the international trading and brokerage giant IG Group, explained that young investors today prefer to put their money in cryptocurrencies instead of gold.
Speaking on CNBC’s ‘Squawk Box’ on July 25, Kinahan discussed gold as an investment asset.
When I was younger, there were a lot of young people who traded in gold, as well as those who had been [gold fans] forever.
I think what happened is a lot of the younger investors put that money into cryptocurrencies, like Bitcoin, Ethereum, whatever.
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According to the CEO, there has been a lot of talk about Bitcoin becoming a hedge against inflation.
I think what’s happened is that those who might have bought gold in the past to hedge against inflation have now turned to Bitcoin and are just not as interested [in gold]. The amount of gold futures we see traded is generally quite low compared to what you would expect in this type of environment.
Amid a rebound in digital asset prices, the market capitalization remains above $1 trillion. As the crypto sector is now experiencing a pullback, this has resulted in capital outflows returning capitalizations below $1 trillion.
Bitcoin led the way, with the leading cryptocurrency struggling to hold above $21,000.