Despite its comparison and similar trajectory to gold, investors seeking alternatives should look into bitcoin, said SkyBridge’s Troy Gayeski.
The price of gold is likely to surge in the coming year, as the Federal Reserve begins tapering its asset purchases, says the SkyBridge Capital co-chief investment officer. Despite this projection, Gayeski, who is also a senior portfolio manager at SkyBridge, says investors seeking currency alternatives as global debt balloons should look into bitcoin.
“We’re going to stick to bitcoin and crypto because we just think there’s more upside,” Gayeski said. Although bitcoin is more volatile, “you’re going to capture a little bit more juice than you will in gold from that same phenomenon,” he added.
The consideration comes as the Federal Reserve (Fed) has begun hinting at scaling back the massive stimulus it has injected into the economy over the past year.
The Fed’s actions came in order to stem the economic contraction from the global COVID-19 pandemic. However, the massive spending has led to higher inflation, while significantly boosting government debt. Both of these consequences have lent credence to the appeal of fiat alternative assets, such as gold or cryptocurrencies.
Although, with the news of the Fed’s eventual tapering, these alternative assets may lose some of their recent luster. Gayeski acknowledged this, but also highlighted these alternatives, “are in a much better place now to handle that eventual taper.”
Bitcoin vs. Gold
Both gold and bitcoin have experienced wild swings in the past few months, amid a year of new heights. Amid rising inflation and the cryptocurrency’s rise to prominence, some are debating its merit relative to bullion. Prominent financial institutions are split in their opinion between the two. While Citigroup Inc. said gold is “losing luster” compared to cryptocurrencies, Goldman Sachs Group Inc. says the two can coexist.
Meanwhile, SkyBridge takes the Goldman perspective and prides itself on its diversified perspective. Still, the company places a special emphasis on bitcoin, perhaps to legitimize it to potentially skeptical investors. SkyBridge is among the dozen or so applicants for a bitcoin exchange-traded fund (ETF) still pending with the SEC. Additionally, SkyBridge founder Anthony Scaramucci recently said any well-diversified portfolio should have at least a small position in bitcoin.