safe-haven asset - Pwim.Net

Will Bitcoin Replace Gold as A 'Traditional Safe-Haven Asset?' Experts Debate

There has been a lot of frenzy ongoing for traditional and crypto markets, with Bitcoin surging for the first time in months and crypto investors jumping at the occasion.

Why Is BTC Soaring?

Nigel Green, CEO and founder of financial consultancy firm deVere Group, addressed Bitcoin’s bullish traction on the crypto market and boldly stated on his Twitter platform that the cryptocurrency was potentially going to “knock gold from its long-held position” of being a safe-haven asset. On traditional stock markets, when stocks drop in value and inflation rises, the trend appears to be to invest in gold, seeing as it is deemed a safe investment.

Green furthermore elaborated and tweeted that the Bitcoin value on the trading market was “surging in tandem with gold on US-China tensions.” As sociopolitical tensions and power struggles are heightening between USA and China, the world’s two largest economies, Green is saying that there is a lot of potential of Bitcoin bullishly soaring even more, if new crypto investors and established BTC bulls took matters into their own hands and diverged from traditional stocks.

As if to prove the truth behind his educated statement, it appears that investors are very much branching out from traditional stock markets, with the global economy going downhill due to the ongoing pandemic and political battles. Bitcoin therefore may regarded by many to be more and more of a safe-haven asset.

Gold Is Also Soaring to The Skies

The price of gold has also been escalating, much to experts’ amazement. A lot of financial investors are speculating that this phenomenon may be due to the worsening of US-China trade and political tensions. Others looked at the economic stimulus package that US plans on delivering and as an explanation, they pointed to the drop of the US dollar resulting from mass money printing.

Investors may therefore turn more to gold and Bitcoin as hedges, leading to a surge in value for both financial assets.

Gold Takes Everyone By Surprise

The jump in gold came as a surprise to many market experts. It is regarded as an unusual phenomenon, because stock prices have also escalated recently, after a drop in early March when COVID-19 began spreading across the US.

Usually seen as a safe haven when stocks are falling or when inflation is rising, the rise of gold comes as a shocker for many, because none of the two mentioned phenomena are currently happening.

Batting For Team Gold- Peter Schiff

Gold-advocate and Euro Pacific Capital CEO Peter Schiff does not appear to share Green’s views on Bitcoin being a safe-haven asset, as the investor has long been known to be “team gold.” On July 27, he tweeted that in light of COVID-19 and the economic downfall resulting from it, the US Federal Reserve “will keep printing dollars until the dollar crashes.” In his opinion, gold investors are fully aware of this mass printing strategy, and so gold will keep on soaring.

What’s Next For BTC?

As for Bitcoin, since its recent surge past the $10,000 checkpoint on Monday, crypto investors are now interested in seeing the cryptocurrency reach the next mark – set at a critical $10,500.

“Bitcoin Better Investment than Gold," Winklevoss Says to Dave Portnoy Over Talks on Elon Musk’s Plans to Mine Gold in Space

In an interview released Friday, Cameron and Tyler Winklevoss, the renowned Bitcoin billionaires and founders of cryptocurrency exchange Gemini, got together with Barstool Sports “Davey Day Trader” Dave Portnoy to discuss Bitcoin.

The Winklevoss twins backed BTC to the fullest and said that it was a better investment than gold.

Bitcoin’s Value Will Go Up with Gold Mining

The American internet celebrity reached out to the Winklevoss twins through his Twitter account and asked them to educate him on Bitcoin (BTC) and how to trade and invest in it properly. In their interview with Portnoy, Tyler and Cameron Winklevoss advised the trader to invest in Bitcoin rather than gold. They said that BTC was a safer asset and the only “fixed asset in the galaxy,” as talks about SpaceX and Tesla CEO Elon Musk’s plans to mine asteroids in the future ensued.

The Winklevoss twins elaborated that given Elon Musk’s plans to mine gold from asteroids, gold’s supply is going to increase, whereas Bitcoin is not. BTC has a supply cap of 21 million, which greatly increases its value as a digital asset given its scarcity in comparison with gold. The Winklevoss twins said:

“Gold is a problem because the supply isn’t fixed like Bitcoin. There are billions of dollars of gold floating in asteroids around this planet.”

In the interview, which generated over 500,000 views on Twitter, Cameron Winklevoss emphasized that for his twin brother and him, Bitcoin was like “internet gold”, which is in parallel to what BTC enthusiasts call the digital cryptocurrency these days – “digital gold.”

Winklevoss thinks that Elon Musk will definitely carry out his plans of mining gold from asteroids in space. Following that logic, when that happens, gold will suddenly become worthless, due to its overflow of supply. In contract, there will only ever be 21 million Bitcoin tokens. As gold does not have a fixed supply, Winklevoss hypothesizes that Musk will potentially “destroy gold.” He further said, “Gold is for boomers who don’t understand that.”

JP Morgan Chase: Bitcoin or Gold?

In a study done by JP Morgan Chase, the strategist team behind the US bank found that older investors have a tendency to invest in gold, while millennials and young investors favored cryptocurrency and tech-related stocks more.

With COVID-19 still looming and investors looking for safe-haven assets, the survey found that older investors trusted the traditional safe-haven asset – gold- more as a hedge. As for millennials, they tended to invest in Bitcoin and tech investment stocks more, despite BTC’s high volatility. In other words, with high volatility comes high risk, but the younger generation was willing to take that chance to potentially gain a high return.

Elon Musk Wants to Conquer Gold in Space

With all this talk about gold and space mining, Elon Musk has publicly answered Dave Portnoy on Twitter, linking a NASA news story reported by Fox News that indicated that it is “eyeing up a nearby asteroid that contains enough gold to make everyone on Earth a billionaire.”

US Space Agency NASA has publicly declared in March that Tesla CEO Elon Musk’s company SpaceX will be the one that will launch a mission in space to conquer the asteroid “Psyche 16.”

Winklevoss Backs Bitcoin

In response to Musk’s tweet, Tyler Winklevoss said, “Looking forward to the day when you smash gold out of asteroids.” The Gemini co-founder is supportive, but it is no secret by now that his brother and he are big Bitcoin advocates.

The Winklevoss twin thinks that this is the perfect time to capitalize on BTC, given the stock market’s entry into “bubble territory” and the depreciation of the US dollar with the Federal Reserve mass printing money for stimulus purposes.

Morgan Stanley Chose This Year’s Best Safe Haven Asset—It’s Not Bitcoin

With the coronavirus pandemic being a catalyst to the cryptocurrency industry, Bitcoin has seen short-lived bull runs recently. The pandemic has led to an era of contactless payment, with cryptocurrency touted to be a potential safe-haven asset against inflation caused by stimulus-provoked money printing seen around the world. It seems Morgan Stanley has not hopped on the cryptocurrency bandwagon yet.

However, Morgan Stanley has opposing views, supporting the greenback. The US Dollar fell to a 27-month low this week against the world’s other currencies, where the dollar index reached 92.477, a level not seen since 2018 when investors were more risk-taking. The S&P 500 has also seen a new all-time high after regaining its losses since the emergence of the coronavirus. Backing the world’s reserve currency, Morgan Stanley analysts wrote:

“We expect the US dollar (USD) to be the best safe-haven currency, especially now that lower US rates make it a more attractive funding currency for carry trades.”

The analysts said they keep a “bearish skew” on the dollar, and said that they expect risk sentiment should remain supported for now. Other currency strategists are worried that the current political uncertainties in the US are hurting the dollar. Boris Schlossberg, managing director at BK Asset Management said:

“The longer the stalemate in DC remains in place the greater the danger that the dollar selloff can turn into a rout.”

Japanese yen and Swiss franc dynamics are shifting

The Morgan Stanley analysts said that although the Japanese yen and the Swiss franc remain safe havens, their dynamics are shifting. They were quoted saying that the recent correlation and flows analysis suggests that the trading pair USD/ JPY could even rally in times of investor fears, counter to market perception.

Morgan Stanley concluded that the yen and the Swiss franc remain relatively safe bets, but the investment bank chose the US dollar as the best safe-haven asset in 2020.

US dollar could crash against foreign currencies, Bitcoin could benefit

Not everyone is bullish on the greenback.

Stephen Roach, former Chairman of Morgan Stanley’s Asia division and Yale University senior fellow said that cryptocurrencies including Bitcoin should benefit from the US dollar’s potential 35% crash.

Roach said that the US dollar could crash by 35 percent against foreign currencies, arising from bullish outlooks of the Chinese yuan and euro. China and the eurozone account for 40 percent of US trade, and the US dollar would not crash unless these two currencies see a significant rise.

Roach highlighted that cryptocurrencies and gold should benefit from dollar weakness. Although the markets are currently too small to absorb major movements in the foreign exchange markets.

US dollar’s role as a global reserve currency on edge, arguments for gold

While Bitcoin has been accelerating to become a new kind of digital gold, the yellow metal has recently seen its own rally, reaching past the record $2,000 mark. In addition to the crypto market rally, gold has gained momentum as investors are debating the prospects of another stimulus payout in the US, and increased geopolitical risks.

The record high in gold prices is raising questions regarding the US dollar’s future as the world’s reserve currency.

Goldman Sachs investment bank has said that the US dollar risks losing its position as the world’s global reserve currency, as revealed by the recent surge in gold prices. Goldman Sachs analysts wrote in a note to clients that gold would be the currency of the last resort, especially in the current environment where governments are debasing their fiat currencies.

Goldman Sachs expects $2,300 an ounce for gold’s price within the next 12 months. The investment bank also lifted its silver outlook from $22 to $30.

Winklevoss Says Bitcoin Price to Reach $500,000 — Why BTC is Better than Gold and Oil

Bitcoin billionaire Tyler Winklevoss firmly advocates that Bitcoin (BTC) is headed towards a markup of $500,000 in pricing and that it will inevitably be the preferred safe-haven asset on the market, rather than gold.

Winklevoss: Why Bitcoin is the best safe-haven asset

The Gemini co-founder had always touted Bitcoin’s horn and preached that BTC’s recent stealthy performance on the market was merely the beginning of an even bigger bull run. Winklevoss firmly believes that it is only a matter of time before Bitcoin replaces gold as the global market’s preferred safe-haven asset.

Winklevoss did an analysis and compared gold, oil, and the US dollar with Bitcoin. Currently, gold’s market capitalization is estimated to be valued at approximately $9 trillion, while Bitcoin (BTC)’s value is currently sitting at around $200 billion in market capitalization. According to Winklevoss’ predictions, Bitcoin’s value will keep climbing steadily, as it is the only asset that is protected against inflation.

The Gemini co-founder asserted that “Bitcoin is ultimately the only long-term protection against inflation,” with a maximum supply of 21 million BTC.

While gold and oil are critiqued by Winklevoss for being hard to store and to move around, Bitcoin on the other hand can easily transferred as an asset and “can be sent anywhere in the world via the Internet.”

Gold vs. Bitcoin

Winklevoss examined gold and said that the problem with the traditionally viewed safe-haven asset was that no one knew what its actual supply was. Also, with Elon Musk’s plans to mine gold from asteroids, gold’s supply is set to increase, while BTC’s reserve will not, making the digital asset scarcer and therefore more valuable.

Elon Musk’s intentions to mine gold has already been backed by NASA. The US Space Agency had already publicly declared in March that SpaceX, Elon Musk’s company, will be the one responsible for launching a mission in space with the objective of conquering the asteroid “Psyche 16.”

Image Source: Tyler Winklevoss

US dollar is going down

As for the US dollar, the hugest dilemma addressed by Tyler Winklevoss is that the dollar lacks stability and is depreciating in value, due to the economic instability and looming inflation. With the coronavirus pandemic impacting global economies and the US bracing for an upcoming round of inflation, Winklevoss pointed out that Americans may be looking at hedge investments such as gold or cryptocurrencies. Taking to his Twitter platform, Tyler Winklevoss stated, “The US dollar is no longer a reliable source of value. Cameron Winklevoss and I make the case for $500K Bitcoin.”

Bitcoin pricing is valued north of $11,353.00 at the time of writing. Winklevoss has been actively promoting Bitcoin for a while, pushing people to invest in the digital asset, as it seems to be the only asset that is protected against inflation. With the cryptocurrency having a maximum cap of 21 million BTC, Winklevoss has therefore publicly touted BTC as the best hedge against inflation.

In recent months, interest in cryptocurrency has soared, as COVID-19 has pushed the dollar to depreciate with the US Federal Reserve mass printing stimulus checks for economic relief purposes. Concerns of inflation increasing at an alarming rate was brought up once again after Federal Reserve Chair Jerome Powell’s speech on Thursday. Powell had confirmed that the Federal Reserve was planning on exceeding its optimal inflation target of 2%.

Winklevoss always believed that the US Federal Reserve’s plans of mass printing stimulus check money were beneficial for Bitcoin. The Gemini co-founder said that it was going to stimulate the surge of BTC pricing on the crypto market. Also, with the current economic turmoil, investors have been looking at cryptocurrencies with renewed interest to secure their assets, in comparison with traditional gold and fiat dollars.

It was reported by crypto exchange giant Coinbase in April that a large amount of Americans had allocated their first COVID-19 stimulus check of $1,200 towards Bitcoin investments, rather than spending it on basic goods and services.

Jim Cramer Says it is Still Not Too Late to Invest in Bitcoin as BTC Price Surges Toward $20,000

One of the things that are frequently being heard is the question, “is it too late to buy Bitcoin”? This question normally takes different forms such as “I wish I got into Bitcoin sooner.”

Bitcoin’s price has exploded recently, hitting above $19,000, taking its market capitalization to an all-time high. While investors are wondering whether it is too late to jump on the Bitcoin bandwagon, Jim Cramer, TV personality on CNBC’s Mad Money and long-time investor has addressed these questions. In his Twitter post On Nov. 24, Cramer stated that he thinks that it is not too late to invest in Bitcoin. He said:

“It is not too late for Bitcoin… great alternative to gold… Which I have always believed in.”

Although Cramer has long talked about cryptocurrencies as part of his famous “Mad Money” show on CNBC media outlets and his Twitter account, he previously had not been positive about crypto assets. He was a Bitcoin skeptic during the historic 2017 bull run. However, he recently changed the tune and now believes in the future of the leading cryptocurrency.

The Mad Money host turned bullish on cryptocurrency in an interview with Anthony Pompliano on Sept. 15 saying that he has realized that Bitcoin is a good hedge against inflation and further mentioned that his kids can understand the digital money. Cramer said in Pompliano’s podcast:

“My kids, when they get my inheritance, won’t feel comfortable with gold and will feel comfortable with crypto.”

Cramer thinks that a major shift in safe-haven assets is on its way and believes that Bitcoin and cryptocurrencies would be the next choice of the next generation. He sees a changing generational mindset on storing wealth from traditional stored like real estates and gold to Bitcoin and cryptocurrencies.

He admitted that maybe he was struck in the past with some of his previous assessments and gold wealth storage leveraging. He talked about upgrading from gold to Bitcoin.

Cramer is one of several prominent Wall Street bulls that have embraced Bitcoin as a safe haven asset. US billionaire Stanley Druckenmiller recently changed course on Bitcoin, stating that the cryptocurrency has the potential to store value for the future generation. Druckenmiller previously invested heavily in gold as a safe haven asset to protect himself from fiat exposures. However, he recently announced that he bought some Bitcoins and admitted that the returns are quite better than gold.