Bitcoin or Gold? What is a preferable hedge fund in current global financial conditions?
In the current uncertain financial market, the community agrees that the current monetary policies from central banks will destroy the financial market. However, there are still arguments about what the investors are going to use as a hedge against current uncertainties.
According to Mark Mobius of Mobius Capital Partners, tightening crypto, regulations may make people invest into gold rather than Bitcoin.
The seasoned veteran believes that if the dovish stance continues, quantitative easing will reach extremely high levels. This will make other stores of value like Bitcoin and gold gain prominence as hedge investments.
Ironically, in the current unstable traditional markets, Bitcoin stakes help to reduce risks in investment portfolios. This position is also signified by the divergence of price action between Bitcoin and other assets.
Mobius is not the only one who believes Bitcoin’s significance as a hedge is rising as he is joined by Jeremy Allaire. Jeremy Allaire, the CEO of Circle, also stated the Bitcoin’s significance as a hedge is increasing amidst traditional market uncertainty.
Jeremy thinks that people prefer decentralized assets as they are not affected by political or regional quarrels. Meanwhile, some investors say the Bitcoin is not a hedge but an investment with a speculative play that has no investment security in the long run.
However, Bitcoin charts disagree as the cryptocurrency has outperformed S&P across the last decade. Moreover, Bitcoin is almost twice as high as it was in January while it has remained a profitable investment for almost ninety-nine percent (98%) of its history.
Hodling Bitcoin has been profitable for 3817 days out of a total of 3869 days. That’s 98.66% of bitcoin’s history.
Green shows where buying bitcoin has been profitable.
The only people that have actully lost money with bitcoin, have just been impatient. pic.twitter.com/kq82I6QTtR
— Rhythm (@Rhythmtrader) August 9, 2019
Bitcoin or Gold? Expert’s View
Mobius staunchly believes that investment in Bitcoin is not the answer as he called them “psycho currencies.” He stated that cryptocurrency trade is a psychological game and depends on whether you believe in that crypto or not. He then added that due to this stable, hard assets like gold are preferable.
Regardless, many cryptocurrency enthusiasts including Barry Silbert of Digital Currency Group believe that Bitcoin will have a massive influx of cash in the next few decades