Bitcoin is the new Gold for people under 40 as the cryptocurrency emerges as a strong asset class
Former US Federal Reserve Governor Kevin Warsh believes that Bitcoin investment makes sense for people under 40 as he considers it the new digital Gold for the younger generation. Warsh made this statement during a Squawk Box interview on CNBC.
Bitcoin emerged over a decade ago. Despite initial criticism from institutional investors and the mainstream financial world, it is gaining adoption globally as more people are investing in the new asset class.
The massive institutional and retail investment in Bitcoin led to the cryptocurrency recording over 400% price increase in the past year. It is currently trading above $37,000, and it could likely go higher as more investors venture into the market.
Warsh stated that part of the current massive inflow of funds into the Bitcoin market is coming from Gold. The former Fed governor stated, “I guess if you are under 40, Bitcoin is your new Gold”.
He believes that if Bitcoin didn’t exist, then Gold would be rallying even more at the moment. Warsh’s view is similar to the opinion expressed by JPMorgan strategists. According to the strategists, Bitcoin’s adoption and growth are coming at the expense of Gold. They highlighted the fact that billions of dollars from Gold markets had moved to Bitcoin.
Warsh added that he thinks Bitcoin makes sense as part of a portfolio in the current economic and political situation. He believes investing in Bitcoin makes sense because of the fundamental shift in monetary policy since Paul Volcker. Hence, he isn’t surprised Bitcoin is performing this excellently.
The cryptocurrency market is experiencing a solid start to 2021 as Bitcoin added $8,000 over the past week. Its performance, along with other leading cryptos like Stellar Lumen (XLM), Ether (ETH), Litecoin (LTC) and others, pushed the crypto market’s market cap to $1 trillion for the first time.
The leading cryptocurrency has a long way to go to catch up to Gold. The Bitcoin market is worth roughly $700 billion, while Gold has a $10 trillion market cap. However, recent institutional and retail investments in Bitcoin show that the cryptocurrency is being viewed as a valuable asset.