Bitcoin (BTC), the world’s most valued cryptocurrency, has replaced gold as a hedge against inflation for young investors, according to a Wharton finance professor.
Gold’s performance was “disappointing” in 2021, He said Wharton School finance professor Jeremy Siegel in a CNBC Squawk Box interview on Friday.
On the other hand, BTC has increasingly emerged as an inflation hedge among younger investorsSiegel argued:
“Let’s face it, I think that Bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold. Digital currencies are the new gold for millennials. I think the history of gold is a fact that the young generation is considering Bitcoin as a substitute. “
Siegel also recalled that previous generations witnessed how gold had exploded during the inflation of the 1970s. “This time, it is not in favor,” he added.
Gold, which traditionally emerged as an asset class that provides a hedge against inflation, fell short of investor expectations in 2021, posted its worst year since 2015 and fell about 5% to close the year at $ 1,800. Despite massive price fluctuations over the course of 2021, BTC had risen around 70% by the end of 2021.
Several prominent global investors supported BTC on gold in 2021, and the owner of the Dallas Mavericks, Mark Cuban argued that Bitcoin was “better than gold” in October 2021. Starwood Capital Group co-founder Barry Sternlicht also said that gold was actually “worthless” and that he has BTC because all governments were printing massive amounts of money.
But even though BTC is becoming an increasingly popular asset against gold, many financial and crypto experts believe that it has yet to prove its inflation hedging status.
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