Gold Is Good But Bitcoin’s Better for $7.5 Billion Hedge Fund

Gold is set to hit new highs next year, but investors looking for currency alternatives as global debt rises should look to Bitcoin, according to a $ 7.5 billion hedge fund.

Both are likely to rebound even if the Federal Reserve moves to curb asset purchases, said Troy Gayeski, co-chief investment officer and senior portfolio manager at SkyBridge Capital. The two are often compared by investors, with former Treasury Secretary Lawrence Summers saying that as something like digital gold, cryptocurrencies could remain a feature of global markets.

“We’re going to stick with bitcoin and crypto because we just think there are more benefits,” Gayeski said in a phone interview last week. Although there is more volatility, “you will get a little more juice out of this phenomenon than in gold,” he added

Photographer: Joe Buglewicz / Bloomberg

Investors are following the Fed’s comments as inflation ticks higher and policymakers nearer reducing the huge asset purchases that saved the economy from the turmoil created by the pandemic. Monetary support has pushed the Fed’s balance sheet to a record high, while hefty budget spending has pushed public debt up. Both of these can pose a potential risk to the value of the dollar and potentially polish up the attractiveness of alternatives.

“All of the fiat currency alternatives – all of which have gone through significant corrections relatively recently – are now in a much better place to deal with this eventual rejuvenation and gradual slowdown in money supply than they were when they reached higher heights.” “Said Gayeski.

Bitcoin and gold are both well positioned to withstand the Fed taper, SkyBridge says

Both Bitcoin and gold have seen significant swings this year that unfolded amid a debate over whether the cryptocurrency was pulling demand from gold bars. The digital token rose to a record nearly $ 65,000 in April before crashing. Most recently it was $ 36,000. Gold was close to sinking into a bear market in March but reversed price to make up for losses since the beginning of the year.

Leading Wall Street banks are divided on the pair’s relative merits – Citigroup Inc. has said gold is “losing its luster” versus cryptocurrencies, while Goldman Sachs Group Inc. argued that the two assets coexist. Tesla Inc. boss Elon Musk, whose tweets have shaken Bitcoin prices this year, said in May that he supports cryptocurrencies versus fiat or paper currencies.

Comments are closed.