Fed Governor Adriana Kugler to resign
By Senad Karaahmetovic
Bernstein analysts offered their thoughts on the Gold vs Bitcoin discussion during periods of crisis.
Gold prices are up ~11% over the last month as they trade near record highs. Bank of America commodity analysts warned last week that gold prices could trade around $2500 in the coming years.
“When we speak to investors, we often hear people expecting a hard landing and the markets have started positioning for a U.S. dollar debasement and U.S. rate cuts, thus there is a rising preference for Gold as a hedge,” Bernstein said in a client note.
For the same reasons that investors see gold attractive in this type of environment, the analysts make a case to like Bitcoin “even more.”
“Despite Bitcoin being the best performing asset this year (up ~71% YTD), there is limited belief that this is structurally a new Bitcoin cycle, and that Bitcoin will see fresh allocations.”
For them, this is “irrational.” Below, the analysts explain why.
“When there is a massive monetary debasement event, while both Bitcoin and Gold rally, Bitcoin outperforms Gold. For example, post-Covid monetary printing, Bitcoin outperformed Gold (2.9x over ~3.5 years). In fact, even this year, since the banking crisis fears have escalated, Bitcoin rallied ~71% YTD vs. Gold rallying ~10% YTD.”
“In our view, liking Gold, but not liking Bitcoin is like hating on a faster horse,” the analysts concluded.