I expect to ruffle some feathers with today’s MoneyWire, but I feel very strongly that you need to know this information.
It really hit me during a recent online get together with my subscribers. I asked them whether they owned gold or not.
Holy smokes … I couldn’t keep up with the responses.
I’m not going to tell you to run out and sell your gold, but I do think it is not the holding it once was. It’s time to question whether to own it.
For my money, there’s a newer and better alternative investment. It has the same characteristics but a lot more upside potential …
Stocks slipped about 2% this past week — most of which came on Thursday. The Dow fell 559 points that day and the headlines screamed. The issue was increasing bond yields, which can signal higher interest rates and inflationary pressures.
For as long as anyone can remember, the go-to investment in times of rising rates and inflation has been gold.
Well, the SPDR Gold Shares (NYSEARCA:GLD) ETF was down Thursday and Friday, so that didn’t help. And over the past five years, it’s gained just 37%. That’s about a third of the S&P 500’s 96% gain in that same time.
I’ve been telling anyone who will listen about the enormous gains that are possible by owning cryptocurrencies. Bitcoin, yes, but especially smaller coins known as altcoins, which have even bigger potential.
Some gold is probably fine for your portfolio, but it is no longer the best hedge against inflation.
That title now belongs to cryptocurrencies.
Like gold, silver, and commodities, bitcoin and some altcoins serve as a store of value during turbulent conditions. In fact, they can be an even better store of value.
In bitcoin’s case, total supply is capped at 21 million bitcoins (and 88% of those have already been “mined”). Cryptos are basically next-generation software, so bitcoin is not a corporation or a government that bends to doing what’s easy or convenient in a given moment. Bitcoin has no president or CEO … no board of directors that can intervene and rain down cash bailouts on the over-spenders.
But that’s just a quick glance at why I believe bitcoin is superior to gold right now. Here’s a look at my five strongest reasons …
Supply: Both gold and bitcoin have limited supply, but the argument is more bullish for bitcoin over the long term.
Authenticity: Bitcoin and altcoins can be verified on the blockchain in a matter of seconds. Verifying gold takes much longer and is more expensive.
Transferability: Bitcoin is a digital asset, so it can be sent via the internet to anyone around the world with a connected device. Gold can also be transferred, but delivering a physical bar of gold is not easy (did I mention they’re heavy?) and definitely not safe.
Liquidity: Bitcoin is sold on any number of large, billion-dollar exchanges in a matter of seconds. Gold is not so easily converted into cash, making it a lot less liquid than bitcoin.
Legal Tender: Bitcoin is only 12 years old, but it is already a payment option at many places … with more joining the list each day. Tesla (NASDAQ:TSLA) recently announced its hope to accept bitcoin as payment for vehicles. Gold, on the other hand, is rarely used to buy goods and services. Can you imagine walking into the mall with a bar of gold in your pocket?
Bottom line: Bitcoin is the new digital gold.
In addition to many of the same hedge benefits as gold, cryptos also give you massive upside potential … especially altcoins.
Quite simply, people are waking up to the fact that cryptocurrencies are one of the most valuable, most revolutionary technologies ever created.
Cryptos and the blockchain technology they are built on are going to change everything. The way you buy everyday goods and services… purchase a home… pay your taxes … even how you order a pizza.
This transformation is already underway, but the truly seismic shift — when the massive profits are made — is coming as businesses, consumers, and those big-money investors realize what’s going on.
As they do, there will be an enormous rush into this asset class. In fact, we’re already seeing it.
In just the last month, bitcoin topped a market value of $1 trillion. Only four U.S. stocks are valued higher, and they are the big boys — Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT).
Investment banks are also stampeding into bitcoin, including the biggest of all. Blackrock is the world’s largest asset management firm with nearly $8.7 trillion under management. The firm’s chief investment officer of global fixed income recently said it has “started to dabble in bitcoin.” That may not sound like much, but don’t underestimate its significance and the credibility it lends to cryptos.
In addition, one of the best-known crypto exchanges is preparing to go public and generating all kinds of buzz. Coinbase could start trading on the Nasdaq as early March. Based on recent shares in Nasdaq Private Markets, it was valued around $100 billion. If that’s the value when shares start trading, it would be the most valuable company to go public since Facebook in 2012.
And then there’s North America’s first bitcoin exchange-traded fund in Canada, which got off to a blazing start. Purpose Investments’ bitcoin ETF now has nearly $700 million in assets under management after launching a little over one week ago.
This big money realizes that if they don’t adopt a plan today, they will be left behind. The same is true for investors.
But this great crypto awakening is still in its early stages. That means there’s still time to get in for the big money … if you act soon.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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