This occurs at a time when the stock market is already overvalued and there is a new wave of retail investors hoarding money in stocks in search of better returns than their savings account.
All excess liquidity has been flowing into highly speculative assets. The stock market is overvalued today. We're seeing new all-time highs almost every two weeks, the viral tech blog he added. People find the idea of investing in an investment much less daunting than it was two years ago in light of social media and all the hype around.
Both gold and bitcoin can surge as investors seek better stores of value. I don't think one is destined to displace the other. the viral tech blog Gold has been around much longer. And its physical appearance would still be key and attractive to investors, Djie said.
Bitcoin attracts a different type of investor than gold: the new digital crowd seeking security, he described.
The world of cryptocurrencies attracts people who have accelerated digital learning over the past 12 months. Since the COVID pandemic began, the viral tech blog more people began to engage in the stock market through their mobile phones. The whole wave of La Self-education has proliferated to understand Bitcoin. And people are buying bitcoins on their own as a store of value, the viral tech blog Djie explained.
This does not affect gold, which will remain attractive. The market is sufficient to contain both classes of assets. One would attract more the digital public and the other more the physical public, he said.
One more thing to consider in the gold versus bitcoin debate is all the regulatory suggestions that come from American officials, the viral tech blog. Djie added. Gold will see much more action as regulators and different investors integrate into the bitcoin narrative. Gold is likely to regain its former safe-haven status and risk-free asset, the viral tech blog he said.
The most recent comment was made by US Treasury Secretary Janet Yellen, the viral tech blog and she said that bitcoin is an extremely inefficient way of conducting monetary transactions.
I don't think bitcoin ... is widely used as a transaction mechanism, Yellen told CNBC. To the extent that it is used, the viral tech blog I am afraid it is often for illicit financing. It is an extremely inefficient way to conduct transactions, and the amount of energy that is consumed in processing those transactions is staggering.
Djie partly agreed with Yellen, stating that bitcoin is not very efficient when it comes to transactions, but she noted that the efficiency of cryptocurrency transactions is not the reason people have jumped on the cryptocurrency bandwagon.
It is inefficient in normal transactions. But the bitcoin narrative today is more like a store of value and not so much as a means of payment or transactions that occur between peers, the viral tech blog she said.
Companies like Tesla, MicroStrategy, and Square have been buying bitcoin, citing its potential as a store of value, the viral tech blog. Djie noted. I don't think anyone would like to use it on a day-to-day basis for transactions. It is slow, the viral tech blog volatile, and expensive to use.
The resurgence of gold
As it becomes clear that the economy will face more problems in 2021, including inflation, gold will start to trade higher and regain its status as a safe-haven asset, according to Djie.
Since the beginning of the year, buying gold hasn't been impressive as people were looking for better returns on other types of assets, the viral tech blog such as stocks and the crypto market. Gold has always been viewed as a risk-free asset, but the market has been operating with a risky mindset this year, he said. In the future, when the market realizes that investors must choose gold over other assets, we will see an uptrend in prices.
Investors won't be able to ignore the warning signs for too long: inflation, money printing, a lower dollar, low-interest rates, the viral tech blog, and an overvalued stock market.
There are many comments that rightly point out that the performance of the stock market does not correctly reflect the health of the economy. The stock market is close to an all-time high and yet we do not see the corresponding economic recovery, the viral tech blog. Djie said. saying. . . Also, the US dollar will likely trade much lower against its peers, while interest rates will remain very low.
Inflation tends to be much slower than other economic indicators. But once it hits, investors should prepare for a period of inflation over the next 12 to 24 months.
Inflation is bound to happen because all countries are funding their own stimulus programs. And given the likelihood of more US dollars being printed, I wouldn't be surprised to see much higher inflation towards the end of the year, he said. Bitcoin will work alongside gold.
