Russ Koesterich, BlackRock’s chief investment strategist, believes gold is failing as a hedge against inflation today. Is this an opportunity for cryptocurrencies?
Russ Koesterich: Gold is no longer a safe haven
– The effectiveness of gold as a collateral is declining – argues Koesterich.
He added that a certain image of gold as an asset that protects investors from inflation, “was a bit exaggerated. ” He even began to suggest that the precious metal is a bit of a relic of the past. As noted, gold has been around for centuries “A reasonable means of accumulating value”, but now it is “Less reliable on most investment horizons.”
He stressed that the role of the precious metal has now changed.
– For this reason, gold should probably continue to be used as collateral for the dollar. If I did not have a firm view of the dollar’s decline, I would have less gold – He said.
Koesterich was somewhat skeptical about gold a year ago.
– This is an imperfect protection, but is still available for purchase – stated in summer 2020. He expected the gold rate to rise due to the period of uncertainty in the markets. In addition, the boom was supposed to be driven by negative interest rates. He also said at the time that he believed gold was only a long-term hedge against a depreciating dollar.
Is Bitcoin the answer?
It is worth adding that Koesterich did not mention Bitcoin (BTC), which is nowadays often advertised as digital gold. Only BlackRock is doing so, which shows a growing interest in this nascent asset class.
Rick Rieder, investment director of BlackRock Global, said in November 2020 that BTC “can largely replace gold “. A month later CEO Laurence D. Fink said BTC could change the global market, making the dollar less important.
The debate as to whether gold is the optimal asset in times of crisis continues. Precious metal supporters may be saddened by the fact that so far BTC better protects the value of investors’ savings. Even over the last week, the cryptocurrency has increased by as much as 20 percent, and the digital currency, Ether, the second in terms of market capitalization, by over 21 percent.