Monday, September 4, 2017

Financial analyst sees gold price real winner as investors dump stocks and governments crack down on cryptocurrencies

Over the weekend we saw a number of major economics begin serious discussions on the legality of cryptocurrency use within their own borders and across the BRICS coalition.  And as the potential for government crackdowns on Bitcoin and other cryptocurrencies begins to unfold, one financial analyst for the Templeton Emerging Markets Group believes that this will only increase investors moving their money out of cryptos and into gold at a much greater clip.

Mark Mobius is sensing danger in the explosive growth of cryptocurrencies. 
Governments will begin clamping down on digital currencies because of their use in illicit financing, with terrorist groups to drug dealers contributing to their rise, Mobius, executive chairman at Templeton Emerging Markets Group, said in an interview in Hong Kong Monday. 
“Cryptocurrencies are beginning to get out of control and it’s going to attract the attention of governments around the world,” Mobius said. “You’re going to get a reversion back to gold because people are going to wonder, can I really trust these currencies?” 
And the crackdown may have already started -- at least in China, home to the majority of bitcoin miners. 
The People’s Bank of China said Monday that initial coin offerings are illegal and that all related fundraising activity should be halted immediately. The central bank said it has completed investigations into organizations and individuals who have conducted so-called ICOs, and have ruled that such activities disturb financial order and will be banned. 
In the U.S., both banks and regulators are studying distributed ledger technology. Federal Reserve officials have made a couple of formal speeches on the topic in the past 12 months, but have voiced reservations about digital currencies themselves. 
Mobius isn’t the only one voicing concern. Bank of America Merrill Lynch was cautious around bitcoin in July, saying there were a lot of obstacles, such as theft and hacking risks, that make it unlikely it will gain the status of pledgeable collateral. - Bloomberg Markets


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