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This Rare Metal Is Outperforming Bitcoin

This Rare Metal Is Outperforming Bitcoin

Bitcoin may be up more than 100% since the start of the year, but there’s another commodity that’s outpacing it by a long-shot.

Bitcoin has been on a wild ride this year.

It surged past $1 trillion in value in February, then rose to a new all-time high above $61,000 in mid-March before falling to around $52,000 days later. 

To start April, the world’s largest cryptocurrency sits just above $58,000. Even with all the volatility, bitcoin is up 101% so far this year.

And its no wonder. Bitcoin is increasingly garnering institutional attention, driving it ever higher. Last month, Morgan Stanley became the first big U.S. bank to offer its wealth management clients access to bitcoin funds. This week, Goldman Sachs followed suit. You can also now use bitcoin to buy a Tesla or pay for a new pair of ostrich cowboy boots via PayPal.

With seemingly all eyes are on the digital coin, one ultra-rare metal has been outpacing it: Iridium. 

Iridium has risen more than 138% since the start of the year, rallying on supply disruptions over the past year amid rising demand for use in everything from electronic screens to spark plugs. It is one of the rarest precious metals and is mined as a byproduct of platinum and palladium, primarily in South Africa which produces 80 – 85% of the world’s supply of the rare metal. 

But investing in iridium is difficult. Demand is dominated by industrial users, and isn’t traded on a bourse or through ETFs, thus investors are limited to buying ingots from just a handful of dealers the world over. 

There’s also currently a supply shortage after Anglo American Platinum (OTC: ANGPY)—which is the world’s largest producer of platinum, and also produces platinum group metals (PGMs) including iridium—had to close its South African plant in November due to a series of water leaks just when iridium demand was growing. Even still, Anglo American Platinum has been driven up more than 52% so far this year.

“Iridium has the longest processing time of all the PGMs, so supply is set to be impacted (by the Amplats closure) well into 2021, providing support for sustained high prices,” Heraeus Group said at the time.

What’s more, “the lead time on the supply side is too long to increase supply in a timely fashion,” Valent Asset Management portfolio manager Jay Tatum said. “The only near-term solution is higher prices to get people to sell their existing holdings.”

As of Thursday, Iridium is trading at $6,200 an ounce, making it three times more expensive than gold.

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