Troy A. Gayeski, Co-Chief Investment Officer at Skybridge Capital, said gold would mount to fresh highs in the coming year, investors exploring alternatives should look into bitcoin.
The company’s Bitcoin fund has gained 51.2% since its launch in late December. Gayeski stated,
We’re going to stick to Bitcoin and crypto because we think there’s more upside, while there’s more volatility, you’re going to capture a little bit more juice than you will in gold from that same phenomenon.
The consideration came as the Federal Reserve (Fed) started hinting at scaling back the massive inducement it has infused into the economy over the past year.
The Fed’s efforts were taken in response to the global COVID-19 pandemic’s economic recession. On the other hand, the colossal expenditure has resulted in increased inflation and a significant increase in government debt.
Although, with the knowledge of the Fed’s eventual tapering, these alternative assets may lose some of their recent glories. Gayeski admitted this but also highlighted these alternatives “are in a much better place now to handle that eventual taper.”
Despite signs of improvement, the Fed continues to buy $120 billion in Treasury and mortgage-backed securities each month, and its balance sheet has grown to $8 trillion, or almost a third of GDP. Talks about reducing that support can increase Treasury rates and the currency, lowering gold’s attractiveness, are getting closer. Gayeski said,
The only reason we exist professionally is to find interesting ways to generate attractive non-correlated returns that also have an attractive risk-reward profile.
Amid a year of record highs, both gold and bitcoin have seen tremendous fluctuations in recent months. Some are questioning the cryptocurrency’s merits compared to bullion in the face of growing inflation and its ascent to popularity.
The views of major financial institutions are divided between the two. According to Citigroup Inc., Gold is “losing luster” compared to cryptocurrencies, while Goldman Sachs Group Inc. says the two can coexist.
SkyBridge, on the other hand, adopts Goldman’s viewpoint and prides itself on its diversity. Despite this, the corporation focuses a specific emphasis on bitcoin, maybe to legitimate it in the eyes of critics.
SkyBridge is among a dozen or so candidates for a bitcoin exchange-traded fund (ETF) that has yet to be approved by the Securities and Exchange Commission (SEC).
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