Monsters of Rock: Will the Bitcoin bogey grow for gold miners?

Goldman Sachs, the investment bank which dubbed copper the new oil last year, has come out swinging with more bold predictions, saying Bitcoin could rise to US$100,000 by claiming 50% of the world’s store of value market within five years.

Goldman Sachs’ Zach Pandl, Bloomberg reports, estimates in a note Bitcoin has a weighted market cap of around US$700 billion, around 20% of the store-of-value market.

That makes it a bogey for gold, which has suffered from malaise around the US$1800/oz mark through the back end of the pandemic despite rising inflation across the world.

Inflation has traditionally been viewed as a support for gold prices.

ETF outflows in particular have hit gold demand, with many investors turning instead to crypto as a store of wealth outside the traditional financial system.

Goldman estimates gold currently has a $2.6 trillion, roughly 80% share of the store of value market.

Spot gold was up 0.7% to US$1814/oz overnight, spurring a small rally in the large gold miners.

Cadia gold mine owner Newcrest (ASX:NCM) was the best off among the locally listed plays, rising 1.25% to a market cap or ~$20 billion.

Kirkland Lake was up almost 2% as well on tiny volumes. The company, which is forming a North American major with TSX-Listed Agnico Eagle and owns the high-grade Fosterville mine in Victoria, is primarily listed overseas.

Newcrest share price today:

Troy Resources announces recapitalisation plan

Troy Resources (ASX:TRY) is a well known name in West Australian gold circles, and was a 100,000ozpa plus gold miner less than a decade ago with major operations in Brazil and Argentina.

It has struggled since heading off to Guyana, where it owns the Karouni operations, and has been swimming in debt as the open pit there has wound down.

Troy wants to head underground at Karouni through the Smarts mine, which would be the first underground gold mine in the tiny South American nation.

One of its selling points for new investors is the involvement of Barrick, the Canadian gold giant and one of the world’s largest gold miners, which is farming into some exploration ground around Karouni in Guyana.

Under the terms of the deal, Troy would convert around $18.2 million of debt to equity and raise $7.2 million in new funds at 2.2c a share to return to the boards of the ASX.