Do you know the number one worry for investors right now?
It’s not Covid-19.
It’s not even higher interest rates, which have been blamed for some of the market’s big down days.
At least that’s what a recent survey of fund managers showed, with 37% listing it as their top concern that could hurt stocks.
Money flow bears that out. In the last week, investors put $1.2 billion into funds that buy Tips, which are inflation-protected securities. For the last 29 weeks, more money has come into Tips funds than has gone out.
If inflation is your number-one concern — and even if it’s not — you need to look at this.
For as long as anyone can remember, the go-to investment in times of rising rates and inflation has been gold.
But I think we’ve hit the end of “as long as we can remember.”
I’m not going to tell you to run out and sell your gold, but I do think it is not as compelling as it once was. It’s time to question whether to own it.
For my money, there’s a newer and better alternative. It has the same characteristics but a lot more upside potential.
Some people call it digital gold.
The chart below shows Bitcoin (CCC:BTC-USD) versus gold over the last 12 months, and I think it shows you exactly what I mean. Bitcoin has gained almost 590% while gold is up a whopping 4%.
If you think that’s because inflation is a more recent concern, well, here’s the same chart year-to-date …
That’s a pretty open and shut case. 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 (cryptos other than Bitcoin) 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 89% of those have already been “mined”). It cannot be manipulated.
Cryptos are basically next-generation software, so Bitcoin is not a corporation or a government that bends to what’s easy 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. Here’s are my five biggest 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 (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.
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) now accepts 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?
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 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.
Bitcoin topped a market value of $1 trillion earlier this year. It has pulled back recently, but only four U.S. stocks are worth more than $1 trillion — Alphabet (NASDAQ:GOOG, 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, the largest U.S. cryptocurrency exchange, Coinbase (NASDAQ:COIN), just went public last week … and already trades with a market valuation of $58 billion. Earlier this month, Coinbase said it has $223 billion assets on the platform, with more than half of that — $122 billion — from institutions.
This big money realizes that if they don’t adopt a plan today, they will be left behind. The same is true for investors — those who are concerned about inflation, and those who are not.
Cryptos are the new digital gold, and the crypto Main Street revolution is still in its early stages. That means there’s still time to get in for the big money … but you have to 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.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.