Deutsche Bank strategist Jim Reid reportedly wrote that investors are increasingly demanding to use bitcoin instead of gold to hedge dollar risk and inflation. His research dovetails with that recently published by analysts at JPMorgan which shows that institutional investors are moving from gold to bitcoin.
Investors replace gold with Bitcoin
In a report discussing the performance of several investments after vaccination, Deutsche Bank research strategist Jim Reid wrote: “One of the quirks is the dramatic discrepancy between gold (-3.6%) and silver (-4.4%) on the one hand. and bitcoin (+ 13.4%) on the other hand, ”according to the publication Zerohedge. Reid explained:
There also appears to be a growing demand for the use of bitcoin where gold was used to hedge dollar risk, inflation, and other things.
Reid noted that “Bitcoin is up + 3% overnight and seems to be building its own momentum. It has risen by over 70% over the past six weeks as more investors begin to see it emerging as a credible asset to invest in. Reid recently wrote in Deutsche Bank’s November Konzept report that “In the long run, central bank digital currencies will replace liquidity.”
Recently, JPMorgan analysts also pointed out that institutional investors are switching from gold exchange-traded funds (ETFs) to bitcoin through Grayscale Bitcoin Trust (GBTC).
Several hedge fund managers have also said bitcoin could beat gold as a store of value, including notorious billionaire investor Stan Druckenmiller. Another hedge fund manager, Bill Miller, said all major banks would end up being exposed to bitcoin.
Do you agree with Deutsche Bank? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Warning: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, nor a recommendation or endorsement of any products, services or businesses. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.