Traders Prefer Bitcoin Despite Silver Having its Best Week Since 2016

  • Silver had its best week of trading since 2016, but analysts prefer bitcoin and gold. 
  • Bitcoin's recent price volatility may have pushed investors back into precious metals for the short-term. 

Silver just had its best week since 2016, but traders say bitcoin is still the better option for investment. 

Silver's Big Week

Despite silver having its best price week in the last four years, the precious metal is still lagging behind bitcoin as an investment vehicle. According to a report published by CNBC, silver is beginning to lose its shine as a store of value asset. 

On Thursday, July 18, silver closed on a new 2019 high and had its single best week of trading since 2016. Following on its heels, the price of gold jumped to a six-year peak after steadily rising throughout 2019. 

Some investors interpreted the rally as renewed interest in the precious metals market. However, veteran analysts cautioned against buying into the hype. 

Traders Prefer Bitcoin

Jim Iuorio, managing director at TJM Institutional Services and a futures and options trader, told CNBC’s “Futures Now” platform that the excitement for precious metals would likely subside. 

“I think it could fade. It does have a history of lagging behind gold and then catching up all at once. This is obviously one of those instances, but I think something fundamentally has to change for it to chew through those old highs, in my opinion.”

Iuorio speculated that silver was receiving attention, in part, because of the increasing volatility of bitcoin. While crypto has been on a steady incline since April, the market has undergone erratic pricing through July, leading investors to look for more stable alternatives. 

“I think one of the reasons that silver’s rallied like it [has] is because bitcoin’s kind of been taken off the list of safe havens with its recent volatility, so something had to replace it.”

Short Term Volatility

Brian Stutland, of Equity Armor Investments, believes that bitcoin is still the superior asset for investment, regardless of volatility. 

“I’d short this. I’d even throw in a long gold and play the long-short on it. I still like gold better ... longer term, or even bitcoin after this big pullback here.”

Stutland attributed the falling price of bitcoin to investors losing confidence after last week’s Congressional grilling of Facebook over libra. However, he called the move out of fiat currencies “real,” and predicted that falling interest rates around the globe would force investors into assets like crypto. 

“If interest rates are going to stay below 2% in the United States, if they’re going to stay negative in Europe, [if] they’re going to stay flat in Japan, where else are you going to put your money?”

In addition to bitcoin, he championed gold as a precious metal alternative to silver.