Revisiting Gold and Bitcoin as Commodities Rally
April 27, 2022
Read Time 1 MIN
Commodities are rallying after a 10-year bear market. We explore what this means for gold and Bitcoin as stores of value.
Heading into 2022, CEO Jan van Eck emphasized three key points in his investment outlook:
- Growth and disruptive technologies like crypto are attractive, though richly valued.
- Commodities equities are attractive and under-valued.
- The Federal Reserve would reduce and eliminate stimulus policies.
In research presented during a recent webinar—Bitcoin and Gold: Friends or Foes?—we take a closer look at the current commodities rally and why we believe we’re only in the early innings. Against this backdrop along with recent geopolitical events, we revisit the role of gold and Bitcoin as stores of value.
Access our in-depth commodities investing analysis, with topics including:
- Gold’s role in a portfolio and why we are bullish on gold.
- Investing in gold vs. gold stocks.
- Bitcoin correlation to gold and tech stocks.
- The current inflation cycle and how it compares to previous high inflation regimes.
- How to allocate to both gold and Bitcoin.
Important Information Regarding Cryptocurrencies
VanEck assumes no liability for the content of any linked third-party site, and/or content hosted on external sites.
The information herein represents the opinion of the author(s), an employee of the advisor, but not necessarily those of VanEck. The securities/ financial instruments discussed in this material may not be appropriate for all investors. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security/financial instrument, or to participate in any trading strategy. Past performance is no guarantee of future results.
Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. References to specific securities and their issuers or sectors are for illustrative purposes only.
Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.
Investing in cryptocurrencies, such as Bitcoin, comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.
Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.
- Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
- An investment in cryptocurrency is not suitable or desirable for all investors.
- Cryptocurrency has limited operating history or performance.
- Fees and expenses associated with a cryptocurrency investment may be substantial.
There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.
Information provided by VanEck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.
May 23, 2022
In order to swap cryptocurrencies you may incur crypto gas fees to complete transactions. We look at how crypto gas is used, how to minimize fees and how to ensure successful transactions.
May 19, 2022
As Pranav moves from traditional finance to focus on Web3, he shares what led him to this point and what to expect from the VanEck Digital Assets Alpha Strategy.
May 19, 2022
Learning the nuances of NFTs is no easy task. Experience and research are the best ways to immerse yourself in the NFT space and build your expertise.