Investing in Gold, Silver and other metals has been an easy way for institutional investors to offset inflation, and offer some downside protection in case equity markets pilled back. Retail investors buy Gold coins or Silver bars, and this strategy has been working over the past few decades. The chart below is a 5 Year Gold ETF that is easily investable and liquid. It shows opportunities to buy Gold on dips and stay invested as the metal markets benefit when things go wrong in the world. This is known as a flight to quality – during times of crisis. Flash forward to a new decade, and you find investors seeking another option for flight to quality in Bitcoin.
Bitcoin has become a flight to quality asset since becoming a mainstream asset in 2014. Money managers who bought the asset in 2015 (and many did) found a liquid hedge that has lots of upside, as the price rallied from $250 to $20,000 in a few short years. Bitcoin is much more volatile than Gold and Silver, but is already becoming the flight to quality asset of the future.
It is not only Bitcoin, but there are also 5000 other Digital Currencies that have real use cases and will be part of the crypto revolution that is replacing FIAT Currency as the way we barter changes. The days of government only currency are losing potency as the technological age and the millennial age groups distrust of banks, government and corporate America, in general, get traction.
Learn more about digital currency and Bitcoin here, or reach out to us at MN1 so we can help you come up the curve on these new asset classes.