‘Nothing can replace gold’ but with crypto, one can stake it or lend it
The buzz around cryptocurrencies has significantly increased as compared to the conventional assets such as Gold. Tokens such as Bitcoin, Ethereum, even the meme-based Dogecoin gave astonishing returns in a short-time. In the mean-time, returns on Gold have declined post the pandemic stage.
Sensing a shift in portfolio allocation?
Well, this certainly is the case for this long-time Gold enthusiast who recently joined the crypto buzz. Shark Tank star and investor Kevin O’Leary recently disclosed his portfolio holdings in an interview. It contains more cryptocurrency (around 7%) than gold (5%) for the first time. Although, the business magnate doesn’t plan to sell his yellow metal’s share irrespective of the price drop.
“I have 5% in gold so crypto for the first time is more than gold for me, and I’m going to keep my gold. I see no reason to sell it.”
He also added that he looked forward to becoming more and more active in the space
“…in crypto, it’s not just betting on the price of Bitcoin (BTC) anymore. There are so many other ways to invest, particularly in blockchain opportunities [such as] Solana, and Ethereum… I just see a lot of investment opportunity, and I’m going to be an investor in that space.”
Irrespective of pro-crypto narratives within the community, it’s a good idea to have exposure to both assets. He opined,
“Nothing is going to replace gold… [It] will remain an asset class in portfolios like mine and others as a property. You can’t stake gold. You can’t lend gold… At the same time, with crypto, you have the opportunity to stake it or lend it and get some kind of appreciation of value through interest.”
In addition to this, he mentioned,
So I think they’re two different asset classes… It’s fun to see the press create this controversy between gold and Bitcoin, [but] it’s irrelevant. They’re completely different. From my perspective, having exposure to both is a good idea.”
Needless to say, media tends do drive a wedge between Bitcoin and gold. And along with that, the community still remains divided on the issue. While certain billionaires sided with the precious metal, others have portrayed confidence for BTC as “better store of value”.
Having said that, a few renowned investors have diversified their portfolios between Bitcoin and Gold. CNBC’s Jim Cramer, “Mad Money” host is one amongst that lot.
“At the end of the day, I’m a believer in both gold and crypto,” Cramer said while adding he sees “absolutely no reason to treat these two things as somehow equivalent.”