Bitcoin and gold have both had stellar years so far. The cryptocurrency has gained some 200% since the start of the year; gold is up to highs not seen since the wake of the Great Recession of 2008.
This comes as a majority of other assets have started to stumble, specifically on the back of trade wars (ex. China vs. the U.S., Japan vs. South Korea), geopolitical turmoil (ex. Hong Kong protests), irresponsible monetary and fiscal policies (ex. negative interest rates), and so on and so forth.
Thus, analysts have posed that the two are rallying due to their shared properties of scarcity, decentralization, non-sovereignty, divisibility, and semi-fungibility — which add to claims that they’re “store of values”.
However, a legendary investor recently argued that only one of the duo can be classified as a “real, hard” asset. If true, this would quash any narrative of Bitcoin being a safe haven.
Gold, Not Bitcoin: Mobius
Speaking to Bloomberg earlier this week, prominent emerging markets investor Mark Mobius lauded gold. The Mobius Capital Partners co-founder, who suggests a 10% bullion allocation for all investor, argued that investors should be buying gold “at any level, frankly”.
Backing his point, Mobius argued that the current monetary policies being performed by central banks are on setting the stage for the precious metal to succeed.
Indeed, the world’s central banks are currently embarking on money printing operations, lowering interest rates and injecting money into the economy through open market operations. In some places, interest rates have gone negative.
He argued that the resurgence in gold, which will be (or has been) catalyzed by these policies, will only be aided by Bitcoin, which he dubbed these “new psycho currencies”.
Mobius added that “with the rise of Bitcoin and any of the other cyber-currencies, there’s going to be a demand for real, hard assets, and that includes gold.”
Funnily enough, Mobius isn’t the only one to have brought up this narrative. Max Keiser, an RT contributor that has been invested in Bitcoin for some eight years now, has argued that Bitcoin is bringing hard money back into style. Keiser explained on one of his recent RT segments:
“Bitcoin brings hard money back into the economy and is making everyone accountable. It’s similar to a gold standard which we used to have and which made accountability fashionable a hundred years ago.”
There is a distinct difference between Mobius’s tone and Keiser’s tone, however. The former investor is bearish on Bitcoin as a form of hard money; The latter is bullish, claiming that both gold and the leading cryptocurrency are viable hedges against today’s fiat money and banking system.
Money Printing Still Bullish for Bitcoin
Despite the seemingly bearish-leaning comments from Mobius, the narrative he is laying out should be a net positive for Bitcoin.
Just look to Venezuela, where inflation has killed the value of the local currency, the Bolivar. There, cryptocurrencies have become an adopted form of payment, specifically due to the fact that unlike the Bolivar, their value can’t be inflated away and the coins themselves cannot be seized by governmental authorities.
Other nations also struck by inflation, like Turkey, Zimbabwe, and Argentina, are known to have adopted Bitcoin and other digital assets, again due to their ability to not be susceptible to hidden inflation by central banks.
Devaluing central bank policies and subsequent Bitcoin adoption isn’t only something seen in medium-sized countries.
Earlier this month, the Chinese Yuan against the U.S. Dollar crossed over seven for the first time in decades, specifically due to a decision from the People’s Bank of China to set the daily reference rate above seven.
This coincided with a massive spike in the value of Bitcoin, implying that the central bank’s decision to partially devalue its currency led to demand for the decentralized cryptocurrency.